TB MC Qu. 16-66 (Algo) TaskMaster Enterprises employs... TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product. Standard StandardStandard Quantity PriceCostDirect Materials 7pounds $1.80per pound $12.60 Direct Labor 0.20hour $7.00per hour 1.40 $14.00 During November, TaskMaster purchased 175,000 pounds of direct materials at a total cost of $332,500. The total factory wages for November were $52,000, 80% of which were for direct labor. TaskMaster manufactured 23,000 units of product during November using 152,000 pounds of direct materials and 4,000 direct labor hours. What is the direct materials efficiency variance for November? Multiple Choice $25,200 $17,500 $15,200 $16,200

Standard costing means where standard is set for various cost element and actual cost is then compared with standard and deviations are calculated. CALCULATION OF DIRECT MATERIAL EFFICIENCY VARIANCE FOR NOVEMBER Standard material = 23000*7 = 161,000 pound Actual material used = 152,000 pound Standard price per pound = $ 1.80 per pound Direct material efficiency variance = (Standard quantity – Actual quantity)*Standard price Direct material efficiency variance = (161000 – 152000)*1.80 Direct material efficiency variance = $ 16,200 favourable Hence, the right answer is OPTION D , $ 16,200 , DIRECT MATERIAL EFFICIENCY VARIANCE FOR NOVEMBER.

Answered: TB MC Qu. 16-66 (Algo) TaskMaster…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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TB MC Qu. 16-66 (Algo) TaskMaster Enterprises employs...

TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product.

	Standard		Standard	Standard
	Quantity		Price	Cost
Direct Materials		7	pounds		$	1.80	per pound	$	12.60
Direct Labor		0.20	hour		$	7.00	per hour		1.40
								$	14.00

During November, TaskMaster purchased 175,000 pounds of direct materials at a total cost of $332,500. The total factory wages for November were $52,000, 80% of which were for direct labor. TaskMaster manufactured 23,000 units of product during November using 152,000 pounds of direct materials and 4,000 direct labor hours.

What is the direct materials efficiency variance for November?

Multiple Choice

$25,200
$17,500
$15,200
$16,200

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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