A Company Using a Standard Costing System Uses an Actual

question 24

Multiple Choice

A company using a standard costing system uses an actual quantity of 520 direct labour hours at an actual cost of $5.90 per hour. The direct labour hours quantity allowed was 500 hours at a standard cost of $6.00 per hour. What is the cost of direct labour that would appear in work in process inventory?

• A) $3068
• B) $3120
• C) $2950
• D) $3000

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Definitions:

Security Market Line

The Security Market Line graphically represents the expected return of assets as a function of their systematic, non-diversifiable risk.

Risk-Adjusted Rate

A rate of return that has been adjusted to take into account the risk or volatility of the investment, providing a more accurate measure of its potential reward.

Risk Aversion

A preference to avoid uncertainty, characterized by investors' tendencies to prefer safer investments over more risky ones.

Portfolio Theory

A financial model that describes how to assemble a diversified portfolio to maximize returns and minimize risk based on expected returns and the variance of each asset.