Tangerine Inc. produces plastic grocery bags. Tangerine has developed a static budget for the month of July based on 9,000 direct labor hours. During the quarter, the actual activity was 10,000 direct labor hours. Data for July are summarized as follows: Static budget (9,000 hours) Actual costs (10,000 hours) Direct materials cost $106,000 $128,000 Power 50,000 57,000 Salary of plant supervisor 9,000 9,000 Total $165,000 $194,000 Comparing the static budget to the actual costs, we can conclude that:a. the plant manager should be dismissed. b. power variance is unfavorable. c. direct materials variance is favorable. d. the plant manager was clearly not efficient. e. None of these choices are correct.
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Tangerine Inc. produces plastic grocery bags. Tangerine has developed a static budget for the month...
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