The Standards for One Carton of Wonder Wax Are

question 15

Essay

The standards for one carton of Wonder Wax are:
During the week ended December 4, the following activity took place:
• 4,600 lbs. of raw material were purchased for inventory at a cost of $2.63 per pound;
• 1,050 cartons of finished product were produced;
• 4,225 lbs. of raw material were used;
• 6,140 labor hours were worked at a total cost of $33,463;
• $20,569 actual variable overhead costs were incurred.Calculate each of the following variances:
(a.) Price variance for raw materials purchased.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Variable overhead spending variance.(f.) Variable overhead efficiency variance.

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Definitions:

Classical Economics

Laissez-faire economics. Our economy, if left free from government interference, tends toward full employment. The prevalent school of economics from about 1800 to 1930.

Fiscal Policy

Manipulation of the federal budget to attain price stability, relatively full employment, and a satisfactory rate of economic growth.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Equation of Exchange

An economic equation (MV = PQ) that relates the money supply (M) and its velocity (V) to the price level (P) and quantity of goods sold (Q).