Eliezrie Corporation Makes a Product with the Following Standard Costs

question 112

Multiple Choice

Eliezrie Corporation makes a product with the following standard costs:

In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

-The labor efficiency variance for January is:

• A)$2,200 U
• B)$2,002 F
• C)$2,200 F
• D)$2,002 U

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Definitions:

Deposit Insurance

A protection scheme for bank depositors that guarantees the safety of deposited funds up to a certain limit in the event of a bank failure.

Financial Risk

The possibility of losing money on an investment or business venture.

Open Market Operations

Technique in which the Fed buys or sells government bonds to affect the supply of money and credit.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank, used as a tool in monetary policy.