Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: \[\begin{array} { l l } \text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \\ \text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour } \end{array}\] - During the first quarter, Faas produced 5,000 units of this product. Actual direct materials costs were $29,750. Actual direct labor costs were $184,800. For purposes of preparing the flexible budget, what is the total standard direct labor cost at a production volume of 5,000 units?

A) $180,000 B) $184,800 C) $182,345 D) $179,975 A) $180,000 B) $184,800 C) $182,345 D) $179,975

Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: \[\begin{array} { l l } \text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \\ \text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour } \end{array}\] - During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 direct labor hours and actual total direct labor costs were $184,800. How much is the direct labor efficiency variance?

A) $18,000 U B) $18,000 F C) $13,200 U D) $13,200 F A) $18,000 U B) $18,000 F C) $13,200 U D) $13,200 F

Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: \[\begin{array} { l l } \text { Materials: } & 1.5 \text { pounds per unit; } \$ 4.00 \text { per pound } \\ \text { Labor: } & 2.0 \text { hours per unit; } \$ 18.00 \text { per hour } \end{array}\] - During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 hours of direct labor and actual direct labor costs were $184,800. The direct labor efficiency variance was $18,000 U. Which of the following would be a logical explanation for this variance?

A) The company used more labor hours than allowed by standards. B) The company paid a higher rate for labor than allowed by standards. C) The company used a higher quantity of materials than allowed by standards. D) The company paid a higher price for the materials than allowed by standards. A) The company used more labor hours than allowed by standards. B) The company paid a higher rate for labor than allowed by standards. C) The company used a higher quantity of materials than allowed by standards. D) The company paid a higher price for the materials than allowed by standards.