Bonnot Corporation Makes a Product That Has the Following Direct

question 56

Multiple Choice

Bonnot Corporation makes a product that has the following direct labor standards: The company budgeted for production of 2,100 units in October, but actual production was 1,900 units. The company used 410 direct labor-hours to produce this output. The actual direct labor rate was $20.60 per hour.
-The labor efficiency variance for October is:

• A)$618 U
• B)$630 F
• C)$618 F
• D)$630 U

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Definitions:

Short-Run Profits

Earnings that a company makes over a short period of time, not taking into consideration the full costs of production in the long term.

Profit-Maximizing

A strategy or process by which a business aims to achieve the highest possible profits from its operations.

Market Price

The contemporary pricing at which a commodity or service is offered for exchange in the open market.

Economic Profits

The surplus remaining after deducting both explicit and implicit costs from total revenues, often indicating the profitability beyond normal returns.