Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include: The direct materials efficiency variance is:
A) $60,000 Favourable
B) $60,000 Unfavourable
C) $65,000 Favourable
D) $65,000 Unfavourable

Question

Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include:  The direct materials efficiency variance is:
A) $60,000 Favourable 
B) $60,000 Unfavourable 
C) $65,000 Favourable 
D) $65,000 Unfavourable

Quizplus · Accepted Answer

The Answer of Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include:  The direct materials efficiency variance is:
A) $60,000 Favourable 
B) $60,000 Unfavourable 
C) $65,000 Favourable 
D) $65,000 Unfavourable