Quiz 7 Solutions - QUIZ Ch 7 Solution 1 The Davidson...

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QUIZ Ch 7 Solution 1. The Davidson Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock. Davidson's standard labor cost is $19 per hour. During June, Thomas produced 6,200 stopwatches and used 13,500 hours of direct labor at a total cost of $260,000. What is Thomas' direct labor rate variance for June? A) $1,607 favorable B) $1,607 unfavorable C) $3,500 favorable D) $3,500 unfavorable Answer: Explanation: D) Labor rate var. = (Actual rate per hour - Std rate per hour) × actual hours $3,500 U = ({260,000/13,500} - $19) × 13,500 D
2. Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows: Standard direct materials cost per yard $ 8 Standard direct materials quantity per t-shirt (yards) 1.5 During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows: Actual yards of direct material purchased 1,400 Actual direct materials total cost $ 15,500 What is the direct materials quantity variance for the month? C

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