The Following Information Describes a Company's Usage of Direct Labor

question 119

Multiple Choice

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

• A) $28,000 unfavorable.
• B) $28,000 favorable.
• C) $45,000 unfavorable.
• D) $45,000 favorable.
• E) $17,000 unfavorable.

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Definitions:

Conversion Costs

Costs incurred to convert raw materials into finished products, usually comprising direct labor and manufacturing overhead.

Total Materials Costs

The total expense incurred for materials used in the production of goods, including direct and indirect materials.

Equivalent Units

A concept in costing that converts partially completed goods into a number of completed units, facilitating cost calculation.

Conversion Costs

Costs that are incurred to convert raw materials into finished goods, typically including direct labor and manufacturing overhead.