Question 19

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Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour. During July, 2,000 units were produced using 4,200 hours at $18.30 per hour. The direct labor price variance was

Select one:

a. $3,600 U

b. $1,260 U.

c. $4,860 F.

d. $4,860 U

e. $3,200 U

Question 20

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Crigui Music company produces 60,000 CDs on which to record music. The CDs have the following costs:

Direct Materials $13,000

Direct Labor 15,000

Variable Overhead 3,000

Fixed Overhead 7,000

None of Criguis fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $4,000 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Crigui would be willing to accept to acquire the 60,000 units externally?

Select one:

a. $34,000

b. $21,000

c. $38,000

d. $32,000

e. $42,000