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1. TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for

1. TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product.

Standard

Standard

Standard

Quantity

Price

Cost

Direct Materials

8

pounds

$

1.80

per pound

$

14.40

Direct Labor

.25

hour

$

8.00

per hour

2.00

$

16.40

During November, TaskMaster purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours.

Is the direct labor price (rate) variance favorable or unfavorable?

a.) Favorable.

b.) Unfavorable.

2. Data on Gantry Company's direct-labor costs are given below:

Standard direct-labor hours

30,000

Actual direct-labor hours

29,000

Direct-labor efficiency variance-favorable

$

4,000

Direct-labor rate variance-favorable

$

5,800

Total direct labor payroll

$

110,200

What was Gantry's standard direct-labor rate?

a.) $3.54.

b.) $3.80.

c.) $4.00.

d.) $5.80.

3. The Fellowes Company has developed standards for labor. During June, 75 units were scheduled and 100 were produced. Data related to labor are:

Standard hours allowed

3

hours per unit

Standard wages allowed

$

4.00

per hour

Actual direct labor

310

hours (total cost $1,209)

What is the labor rate variance for June?

a.) $30 unfavorable.

b.) $31 favorable.

c.) $31 unfavorable.

d.) $30 favorable.

4.

Actual machine hours

840

Standard machine hours allowed

900

Denominator activity (machine hours)

1,000

Actual fixed overhead costs

$

3,800

Budgeted fixed overhead costs

$

4,000

Predetermined overhead rate ($1 variable + $4 fixed)

$

5

What is the fixed overhead spending (budget) variance?

a.) $200.

b.) $400.

c.) $300.

d.) $240.

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