Assume that the standard cost to make one finished unit includes 2 hour of direc
ID: 2499599 • Letter: A
Question
Assume that the standard cost to make one finished unit includes 2 hour of direct labor at $8 per hour. During April, 22,000 direct labor-hours were worked, 10,500 units of product were manufactured, and total direct labor cost was $160,000.
What is the labor rate variance for April?
$ 2,000 (U)
$ 2,000 (F)
$16,000 (U)
$16,000 (F)
Which term describes difference between the actual price of materials and the standard price?
Price variance
Standard cost variance
Inflation index adjustment
Materials price index
Information for Tube division is as follows:
Net earnings for division
$40,000
Assets in the division
$100,000
Required of return
16%
What is Tube’s residual income?
$26,000
$24,000
$32,000
$95,200
$ 2,000 (U)
$ 2,000 (F)
$16,000 (U)
$16,000 (F)
Explanation / Answer
Standard cost variance:
Direct Labor Rate Variance: AHxAR(actual cost) - AH*SR 160000-22000*8 16000 F