Cole Laboratories Makes and Sells a Lawn Fertilizer Called Fastgro

question 81

Multiple Choice

Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: The company had no beginning inventories of any kind on Jan. 1. Variable overhead is applied to production on the basis of standard direct labor-hours. During January, the following activity was recorded by the company:
Production of Fastgro: 4,000 bags
Direct materials purchased: 85,000 pounds at a cost of $32,300
Direct labor worked: 390 hours at a cost of $4,875
Variable overhead incurred: $1,475
Inventory of direct materials on Jan. 31: 3,000 pounds
-The labor efficiency variance for January is:

• A) $475 F
• B) $350 U
• C) $130 U
• D) $110 F

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Definitions:

Prospectus

A formal legal document that is required by and filed with securities regulatory bodies that provides details about an investment offering to the public.

Venture Capital

Financing provided by investors to startup companies and small businesses with long-term growth potential in exchange for an equity stake.

Venture Capitalist

A Venture Capitalist is an investor who provides capital to startups or small companies looking to expand but do not have access to equities markets.

Key Considerations

Important factors or aspects that need to be taken into account when making a decision or evaluating a situation.