ACCOUNTING
Multiple Choice
Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 2004, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.10 pounds $30 per pound
Direct labor 0.05 hours $15 per hour
During June RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour.
June’s direct manufacturing labor efficiency variance is
a. $62.50 unfavorable
b. $62.50 favorable
c. $3,811.75 unfavorable
d. none of the above
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