The Collins Corporation Uses Standard Costing and Has Established the Following

question 51

Multiple Choice

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes:

• Direct materials: 4 gallons at $8 per gallon
• Direct labor: 1 hour at $16 per hour

During July, the company made 6,000 units of product and incurred the following costs:

• Direct materials purchased: 26,800 gallons at $8.20 per gallon
• Direct materials used: 25,200 gallons
• Direct labor used: 5,600 hours at $15.30 per hour

The direct materials purchases variance is computed when the materials are purchased.

-The labor efficiency variance for July was:

• A)$6,400 Favorable
• B)$89,600 Favorable
• C)$10,320 Favorable
• D)$6,120 Favorable

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Definitions:

Conformity

is the act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Social Facilitation

The phenomenon that people tend to perform simple tasks better, or complex tasks worse, in the presence of others due to increased arousal.

Depersonalization

Depersonalization is a dissociative disorder where individuals feel detached from their own thoughts, feelings, or body, experiencing a sense of being an outside observer to themselves.

Obedience

The act of following orders or directions from authority figures, often studied in psychology to understand the extent and limits of social influence.