Question
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms $12/kilogram) = $60/unit; direct labor (3.5 hours/unit $20/hour) = $70/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: In-process beginning inventory None In-process ending inventory80% complete as to labor 1,060units Units completed during the period 6,900units Budgeted output 7,500units Purchases of materials (in kilograms) 45,000 Total actual direct labor cost incurred$545,600 Direct labor hours worked (AQ) 27,500hours Materials purchase-price variance$6,300favorable Increase in materials inventory in December 4,050kilograms The direct labor flexible-budget variance for December (rounded to the nearest dollar) was:
Multiple Choice $7,440 unfavorable.$4,400 favorable.$3,240 unfavorable.$13,040 unfavorable.
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