Economic Models

question 36

Multiple Choice

Economic models

• A) may be insufficient to make numerical predictions.
• B) may have untestable conclusions.
• C) both of these are true.
• D) neither of these are true.

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Definitions:

Labour Rate Variance

The difference between the actual cost of labor and the expected (standard) cost, indicating efficiency in labor utilization.

Variable Overhead Efficiency Variance

The difference between the actual hours worked to produce an item and the standard hours expected, multiplied by the variable overhead rate.

Direct Labour Efficiency Variance

The difference between the expected hours to produce a specific number of units and the actual hours used.

Direct Material Used

Direct material used involves the consumption of raw materials that are transformed into and directly identifiable with the finished product in the manufacturing process.