Meow Products Ltd

question 14

Multiple Choice

Meow Products Ltd. Meow Products Ltd. produces and sells scratching posts for cats. In the current year, the company had expected to sell 12,000 posts but actually produced and sold 10,000 posts. The following information is available regarding the standard cost to produce a single post:
In the current year, 38,000 feet of material were purchased out of which 35,000 feet were used at a cost of $1.55 per foot, and 160,000 direct labor minutes were incurred at a cost of $.32 per minute.
Refer to the Meow Products Ltd. information above. The company's direct labor efficiency variance for the current year is:

• A) $ 3,000 U.
• B) $ 3,000 F.
• C) $12,000 U.
• D) $12,000 F.

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Definitions:

Interest Rate

The percentage of a loan that incurs interest for the borrower, usually shown as an annual rate based on the remaining loan balance.

Current Dollars

A term referring to the nominal value of money at the present time, without adjusting for inflation or deflation.

Payment Stream

A sequence of monetary payments that may be periodic or scheduled in some fashion, often related to finance or investing.

Marginal Revenue Product

Additional revenue resulting from the sale of output created by the use of one additional unit of an input.