Galla Corporation Makes a Product with the Following Standard Costs

question 84

Multiple Choice

Galla Corporation makes a product with the following standard costs: The company budgeted for production of 2,400 units in June, but actual production was 2,500 units. The company used 19,850 pounds of direct material and 980 direct labor-hours to produce this output. The company purchased 21,700 pounds of the direct material at $6.70 per pound. The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 per hour. 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 labor efficiency variance for June is:

• A)$384 F
• B)$400 U
• C)$400 F
• D)$384 U

Comprehend the concept and importance of cost drivers in product costing systems.

Identify the advantages and disadvantages of using volume-based vs. activity-based costing.

Understand the difference between theoretical, practical, and normal capacity and their implications on cost allocation.

Assess the impact of different costing methods (variable costing and absorption costing) on financial performance.

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Definitions:

Hardiness

A disposition marked by commitment, challenge, and control that is purportedly associated with strong stress resistance.

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress, typically in the workplace.

Absenteeism

The practice of regularly staying away from work or school without good reason, often measured to assess employee or student engagement and satisfaction.

Chronic Job Stress

Persistent stress experienced over a prolonged period due to work-related factors, leading to negative impacts on health and well-being.