Pardoe, Inc

question 52

Multiple Choice

Pardoe, Inc. , manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours.The company uses a standard cost system and has established the following standards for one unit of product: During March, the following activity was recorded by the company: • The company produced 3, 000 units during the month.
• A total of 8, 000 pounds of material were purchased at a cost of $23, 000.
• There was no beginning inventory of materials on hand to start the month;at the end of the month, 2, 000 pounds of material remained in the warehouse.
• During March, 1, 600 direct labor-hours were worked at a rate of $6.50 per hour.
• Variable manufacturing overhead costs during March totaled $1, 800.
The direct materials purchases variance is computed when the materials are purchased.
The labor efficiency variance for March is:

• A)$5, 040 U
• B)$1, 200 U
• C)$1, 200 F
• D)$5, 040 F

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Definitions:

Simultaneously Provided Services

Services that are provided simultaneously are those that occur or are delivered at the same time to consumers.

Signaling Theory

A theoretical framework suggesting that people signal their ability or quality through actions or investments, which others interpret to make informed decisions.

Efficiency Wages

A theory suggesting that higher wages can lead to increased productivity by improving worker morale, reducing turnover, and attracting more skilled employees.

Signaling Theory

A concept in economics and game theory that explores how parties communicate their quality or intent through decisions or actions that incur a cost or carry an inherent message.