Efficient Corporation Uses a Standard Cost System Refer to the Information Provided for Efficient Corporation

question 101

Multiple Choice

Efficient Corporation uses a standard cost system. The following information was provided for the period that just ended: $\begin{array}{ll}\$ 11.75 & \text { Actual price per gallon } \\5,000 & \text { Actual gallons of material used } \\\$ 17.00 & \text { Actual hourly labor rate } \\24,300 & \text { Actual hours of prochuction } \\\$ 12.00 & \text { Standard price per gallon } \\1 / 2 & \text { Standard gallons per completed urit } \\\$ 12.00 & \text { Standard hourly labor rate } \\3 \mathrm{hrs} . & \text { Standard time per completed urit } \\9,000 & \text { Units completed churingthe period }\end{array}$ Refer to the information provided for Efficient Corporation. The direct labor time variance is:

• A) $31,725 favorable.
• B) $32,400 favorable.
• C) $89,100 unfavorable.
• D) $121,500 unfavorable.

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Definitions:

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

Accounting

The systematic process of recording, analyzing, and interpreting financial information.

Identifies

Identifies means to recognize or establish the nature, characteristics, or details of something or someone, especially for the first time.

Eliminates Need

Refers to the process or action that makes a particular requirement or necessity obsolete or unnecessary.