Pikus Corporation Makes a Product That Has the Following Direct

question 60

Multiple Choice

Pikus Corporation makes a product that has the following direct labor standards: In January the company's budgeted production was 3,400 units, but the actual production was 3,500 units. The company used 640 direct labor-hours to produce this output. The actual direct labor cost was $8,960.
-The labor rate variance for January is:

• A)$700 F
• B)$640 U
• C)$640 F
• D)$700 U

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Definitions:

Optimal Output

The level of production at which a firm or economy can produce goods at the lowest average cost, maximizing efficiency.

Government

The system or group of people governing an organized community, often a state, and the mechanisms and institutions through which they rule.

Efficiency Loss

Efficiency loss, also known as deadweight loss, is the loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Deadweight Loss

A loss in economic efficiency that occurs when the equilibrium for a good or service is not achieved, often due to market distortions like taxes or subsidies.