Flexer Company Ltd Has Set the Following Standards for the Production

question 54

Multiple Choice

Flexer Company Ltd has set the following standards for the production of one unit of product. Normal production each month is 500 units.
During June, actual production amounted to 420 units. All direct material was purchased and used this month. Actual cost amounted to:
Determine the standard direct labour hours allowed for June production.

• A) 2000 hours
• B) 1720 hours
• C) 420 hours
• D) 1680 hours

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Definitions:

Net 30

A payment term indicating that the full payment is due within 30 days of the invoice date.

Economic Order Quantity

A formula used in inventory management to determine the optimal order size that minimizes the total holding costs and ordering costs.

Average Inventory

An accounting metric that estimates the value or quantity of a company's inventory over a specified time period.