Faxon Company, Which Has Only One Product, Has Provided the Following

question 67

Multiple Choice

Faxon Company, which has only one product, has provided the following data concerning its most recent month of operations:
-What is the unit product cost for the month under variable costing?

• A) $122
• B) $108
• C) $99
• D) $131

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to complete a task, multiplied by the standard hourly labor rate.

Materials Price Variance

The discrepancy between the real expense of direct materials employed in manufacturing and the anticipated standard expense for those materials.

Materials Quantity Variance

The difference between the budgeted and actual quantities of materials used in production, affecting cost management.

Standard Cost

A predetermined cost of manufacturing, calculated based on the expected costs of material, labor, and overhead for a unit of product.