Epley Corporation Makes a Product with the Following Standard Costs

question 15

Multiple Choice

Epley Corporation makes a product with the following standard costs:

In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148.

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 rate variance for July is:

• A)$828 F
• B)$828 U
• C)$792 U
• D)$792 F

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Definitions:

Payroll Taxes

Levies placed on either employers or employees, typically based on a proportion of the wages that staff receive from their employers.

Temperance

Moderation or self-restraint, especially in eating and drinking.

Prohibition

The period during which the manufacture, sale, and transportation of alcoholic beverages were banned in the United States through the 18th Amendment to the Constitution (1920-1933).

Tolerance

The need for increasing levels of a drug in order to produce a constant level of effect.