Cole Laboratories Makes and Sells a Lawn Fertilizer Called Fastgro

Multiple Choice

Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: The company had no beginning inventories of any kind on Jan. 1. Variable overhead is applied to production on the basis of standard direct labor-hours. During January, the following activity was recorded by the company:
Production of Fastgro: 4,000 bags
Direct materials purchased: 85,000 pounds at a cost of $32,300
Direct labor worked: 390 hours at a cost of $4,875
Variable overhead incurred: $1,475
Inventory of direct materials on Jan. 31: 3,000 pounds
-The labor efficiency variance for January is:

A) $475 F
B) $350 U
C) $130 U
D) $110 F