The Collins Corporation Uses Standard Costing and Has Established the Following

question 30

Multiple Choice

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: • Direct materials: 4 gallons at $8 per gallon
• Direct labor: 1 hour at $16 per hour
During July, the company made 6,000 units of product and incurred the following costs:
• Direct materials purchased: 26,800 gallons at $8.20 per gallon
• Direct materials used: 25,200 gallons
• Direct labor used: 5,600 hours at $15.30 per hour
The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for July was:

• A)$22,960 Unfavorable
• B)$22,400 Unfavorable
• C)$9,600 Unfavorable
• D)$9,840 Unfavorable

---

Definitions:

General Motors

An American multinational corporation that designs, manufactures, markets, and distributes vehicles and vehicle parts.

Sit-Down Strike

A form of protest where workers physically occupy their place of employment without working, thereby halting production as a bargaining strategy.

Unionization

The process by which workers organize themselves into a union to collectively bargain for better wages, benefits, and working conditions.

Strike Activity

The act of workers ceasing work and forming picket lines outside their place of employment as a form of protest, usually to secure better wages, working conditions, or benefits.