ACCOUNTING
Multiple Choice
Sawyer Industries Inc. (SII) developed standard costs for direct material and direct labor. In 2004, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container.
Budgeted quantity Budgeted price
Direct materials 0.20 pounds $25 per pound
Direct labor 0.10 hours $15 per hour
During July SII produced and sold 10,000 containers using 2,200 pounds of direct materials at an average cost per pound of $24 and 1,050 direct manufacturing labor hours at an average wage of $14.75 per hour.
July’s direct manufacturing labor price variance is
a. $750.00 unfavorable
b. $262.50 favorable
c. $487.50 favorable
d. none of the above
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