Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Argosy Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Argosy uses standard costs to prepare

Argosy Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Argosy uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:
Direct materials: 4 pounds per unit, $4 per pound
Direct labor 5 hours per unit, $17 per hour
Argosy produced 4,000 units during the quarter. At the end of the quarter, an examination of the labor costs records showed that the company used 21,000 direct labor hours and actual total direct labor costs were $375,000. The direct labor efficiency variance was $17,000U. Which of the following is a logical explanation for this variance?
A. The company used more labor hours than allowed by the standards.
B. The company paid a higher cost for the direct materials than allowed by the standards.
C. The company used a higher quantity of direct materials than allowed by the standards.
D. The company paid a higher cost per hour for labor than allowed by the standards.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

11th Edition

0273708708, 9780273708704

More Books

Students also viewed these Accounting questions

Question

Define paraphrasing and reflecting.

Answered: 1 week ago