Question

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: (4.0 kilograms × $10.00 per kilogram) $ 40.00 Labor: (4.0 hours × $18.00 per hour) $ 72.00 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 inventory—90% complete as to labor 1,000 units Units completed during the month 7,200 units Budgeted output 8,000 units Purchases of materials, in kilograms (AQ) 30,000 Total actual labor costs incurred $ 525,000 Direct labor hours worked (AQ) 28,000 hours Materials purchase-price variance $ 3,000 unfavorable Increase in materials inventory in July 1,500 kilograms Beginning inventory of materials 0 kg. The sales volume variance, measured in terms of direct labor cost, for July (to the nearest dollar) was:

Answer 1

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