Biscuit Company Has Developed the Following Standards for One of Its

question 82

Multiple Choice

Biscuit Company has developed the following standards for one of its products. Direct labor hours is the driver used to assign overhead costs to products. Direct materials: 10 pounds × $3 per pound
Direct labor: 2.5 hours × $8 per hour
Variable manufacturing overhead: 2.5 hours × $2 per hour
The following activity occurred during the month of June:
Materials purchased: 125,000 pounds at $2.60 per pound
Materials used: 110,000 pounds
Units produced: 10,000 units
Direct labor: 24,000 hours at $7.50 per hour
Actual variable manufacturing overhead: $51,000
The company records materials price variances at the time of purchase.
The direct labor rate variance is

• A) $12,000 favorable.
• B) $8,000 favorable.
• C) $12,000 unfavorable.
• D) $8,000 unfavorable.

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Definitions:

Sales Calls

Direct interactions between salespeople and potential or current customers, aimed at promoting and selling a product or service.

Competitive Position

A firm's standing or rank in comparison to its competitors in terms of market share, profitability, and product quality.

Job Analysis

A systematic process for gathering, documenting, and analyzing information about the content, requirements, and context of a job.

Sales Position

A role within a company focused on selling products or services, typically involving activities like prospecting for new clients, presenting products, and closing sales.