The Geurtz Company Uses Standard Costing

question 21

Multiple Choice

The Geurtz Company uses standard costing. The company makes and sells a single product called a Roff. The following data are for the month of August:

• Actual cost of direct material purchased and used: $65,560
• Material price variance: $5,960 unfavorable
• Total materials variance: $22,360 unfavorable
• Standard cost per pound of material: $4
• Standard cost per direct labor-hour: $5
• Actual direct labor-hours: 6,500 hours
• Labor efficiency variance: $3,500 favorable
• Standard number of direct labor-hours per unit of Roff: 2 hours
• Total labor variance: $400 unfavorable

-The actual material cost per pound was:

• A)$4.00
• B)$3.67
• C)$3.30
• D)$4.40

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Definitions:

Evaluate

The process of examining something in detail to determine its value or worth, often used in the context of assessing projects or investments.

Direct Materials

Raw materials that can be directly traced to the production of a specific product or service.

Ending Inventory

The financial valuation of items for sale at the conclusion of a financial period, figured by starting with the beginning inventory, adding purchases, and then deducting the cost of goods sold.

Purchased

Refers to goods or services obtained by paying money or its equivalent.