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Machine Builders Inc. adopted a standard cost system several years ago that it uses in...

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Accounting

Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:

Materials: (6 kilograms $10 per kilogram) $ 60
Labor: (8 hours $19 per hour) $ 152

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory none
In-process ending inventory90% complete as to labor 1,000 units
Units completed during the month 6,750 units
Budgeted output 7,500 units
Purchases of materials, in kilograms (AQ) 33,000
Total actual labor costs incurred $ 526,000
Direct labor hours worked (AQ) 25,000 hours
Materials purchase-price variance $ 3,800 unfavorable
Increase in materials inventory in July 1,700 kilograms
Beginning inventory of materials 0 kg.

The direct labor efficiency variance for July, to the nearest dollar, was:

Multiple Choice

$616,600 unfavorable.

$687,800 favorable.

$615,800 unfavorable.

$615,200 favorable.

$623,000 favorable.

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