Arrow Industries Employs a Standard Cost System in Which Direct

question 40

Multiple Choice

Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost.Arrow has established the following standards for the prime costs of one unit of product. During November,Arrow purchased 160,000 pounds of direct materials at a total cost of $304,000.The total factory wages for November were $42,000,90% of which were for direct labor.Arrow manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours.What is the direct labor efficiency variance for November?

• A)$1,800.
• B)$1,900.
• C)$2,000.
• D)$2,090.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its decrease in value over time.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.

Investing Activities

Financial activities related to buying or selling long-term assets and investments, a key component of a company’s cash flow statement.

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowing of the company.