Shade Company adopted a standard cost system several years ago. The standard costs for direct...
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Accounting
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
970
units
Units completed during the period
6,720
units
Budgeted output
7,230
units
Purchases of materials (in kilograms)
40,500
Total actual direct labor cost incurred
$
530,138
Direct labor hours worked (AQ)
26,600
hours
Materials purchase-price variance
$
2,025
favorable
Increase in materials inventory in December
1,800
kilograms
The direct labor rate variance for December, to the nearest dollar, was:
Multiple Choice
$1,862 favorable.
$5,922 favorable.
$8,062 unfavorable.
$24,682 unfavorable.
$59,682 unfavorable.
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