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 | 1,020 | units | |||
Units completed during the period | 6,820 | units | |||
Budgeted output | 7,380 | units | |||
Purchases of materials (in kilograms) | 43,000 | ||||
Total actual direct labor cost incurred | $ | 538,748 | |||
Direct labor hours worked (AQ) | 27,100 | hours | |||
Materials purchase-price variance | $ | 4,300 | favorable | ||
Increase in materials inventory in December | 3,050 | kilograms | |||
The direct labor efficiency variance for December, to the nearest dollar, was:
Multiple Choice
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$3,252 favorable.
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$4,228 favorable.
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$7,480 unfavorable.
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$59,650 unfavorable.
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