James Is Investigating the Advantages of Employee Outsourcing

question 72

Multiple Choice

James is investigating the advantages of employee outsourcing. It appears that the greatest benefit will be to free him and his firm from

• A) the need for extensive training.
• B) fringe benefit costs.
• C) concern about disciplinary action.
• D) excessive paperwork.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity allowed, multiplied by the standard cost per unit.

Direct Labor Rate

The rate paid for the labor time per unit of work or hour worked by an employee directly involved in production.

Cost Drivers

Factors that cause the cost of an activity or process to change, affecting the overall cost of production.

Budgets

Financial plans that estimate income and expenditures for a specific period, often used for planning and control purposes.