Montana Company Uses a Standard Costing System

question 37

Multiple Choice

Montana Company uses a standard costing system. The following information pertains to direct labor costs for the month of February: Standard direct labor rate per hour $15.00
Actual direct labor rate per hour $13.50
Labor rate variance $18,000 favorable
Actual output 1,000 units
Standard hours allowed for actual production 10,000 hours
What is the total labor budget variance for Montana Company?

• A) $18,000 (F)
• B) $12,000 (U)
• C) $18,000 (U)
• D) $12,000 (F)

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Definitions:

Sequential Processing

The cognitive process of understanding and absorbing information in a step-by-step, linear manner.

Parallel Processing

The capability of the brain to process different types of incoming stimuli at the same time.

Focus Attention

The mental process of concentrating on one aspect of the environment while ignoring others, a fundamental aspect of cognitive processing.

Information Processing

A cognitive approach that emphasizes the way people encode, store, process, and retrieve information.