Jackson Industries Uses a Standard Cost System in Which Direct

question 38

Multiple Choice

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost.Jackson has established the following standards for one unit of product. During May, Jackson purchased 125, 000 pounds of direct material at a total cost of $475, 000.The total factory wages for May were $364, 000, 90 percent of which were for direct labor.Jackson manufactured 22, 000 units of product during May using 108, 000 pounds of direct material and 28, 000 direct labor-hours. The labor efficiency variance for May is:

• A)$5, 850 Favorable
• B)$7, 200 Favorable
• C)$6, 000 Unfavorable
• D)$5, 850 Unfavorable

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Definitions:

Joint Tenancy

A form of property ownership in which two or more individuals hold equal rights to the entire property, and upon the death of one, the survivor(s) automatically assume the deceased's part.

Severing

The act of legally separating or dividing property rights, often in the context of joint tenancies turning them into tenancies in common.

Adverse Possession

The process by which one can legally claim ownership of property by occupying it for a certain period, under certain conditions, without the permission of the owner.

Life Tenant

An individual who has the right to use or occupy property during their lifetime, but cannot sell or transfer the property.