MULTIPLE CHOICE:

Use the following information for questions 12-14

Healthy Co. has the following standard cost to produce a king size party sub.

DM 4 lbs @ $3.00 per lb. = $12.00 per sub

DL hour @ $8.00 per hour = $4.00 per sub

During December, Healthy Co. produced 1,000 party subs, bought and used 4,100 of meat at $3.20 per lb. and used 490 hours of labor at a total cost of $4,018.

12. What is the direct material price variance?

A. $800 favorable

B. $820 unfavorable

C. $800 unfavorable

D. $820 favorable

13. What is the direct labor rate variance?

A. $98 favorable

B. $98 unfavorable

C. $100 favorable

D. $100 unfavorable

14. What is the direct labor efficiency variance?

A. $80 favorable

B. $80 unfavorable

C. $82 favorable

D. $82 unfavorable

15. In capital budgeting decisions, the focus is on:

A. Cash flow

B. Accounting net income

C. Working capital

D. Inventory

E. Raw material

16. Which department may be responsible for an unfavorable materials quantity variance?

A. finance department

B. production department

C. purchasing department

D. sales department