Epley Corporation Makes a Product with the Following Standard Costs

question 160

Multiple Choice

Epley Corporation makes a product with the following standard costs: In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for July is:

• A)$2,070 F
• B)$2,070 U
• C)$1,863 F
• D)$1,863 U

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Definitions:

Profitability

A financial metric that measures the degree to which a company or a business activity makes money, indicating the efficiency in generating profits.

Economic Condition

The state of a region's or country's economy, reflected in indicators such as GDP, unemployment rates, and inflation.

Wage Structure

The organization and scaling of wages within an organization, setting the relative pay levels for different roles or job grades.

Job Evaluation

A systematic process used to ascertain the relative worth of jobs within an organization to establish a fair and equitable pay structure.