Multiple Choice

1.The unemployment rate is high in the city in which a company has a factory. The company finds that they are able to pay new employees a lower wage per hour than when the unemployment rate was lower a year ago. Which variance is directly impacted?

a.Materials price variance

b.Materials efficiency variance

c.Labour price variance

d.Labour efficiency variance

2.Thomas Corporation produces stopwatches. According to company standards, it should take 1 hour of direct labour to produce a stopwatch. Thomas' standard labour cost is $18 per hour. During June, Thomas produced 5,000 stopwatches and used 5,150 hours of direct labour at a total cost of $102,500. What is Thomas' direct labour price variance for June?

a.$9,800 favourable

b.$9,515 unfavourable

c.$9,515 favourable

d.$9,800 unfavourable

3.Which of the following best describes a "relevant cost"?

a.A factor that restricts production or sales of a product

b.Cost of developing, producing, and delivering a product or service

c.Expected future costs that differs among alternatives

d.Costs that were incurred in the past and cannot be changed