If the Productivity of Workers Suddenly Rises This Will Result

question 9

Multiple Choice

If the productivity of workers suddenly rises this will result in:

• A) a fall in the MRP, increase in labour demand and a fall in the wage rate
• B) a rise in the MRP, decrease in labour demand and a rise in the wage rate
• C) a rise in the MRP, increase in labour demand and a rise in the wage rate
• D) a fall in the MRP, increase in labour demand and a rise in the wage rate

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating labor and overhead costs.

Variable Overhead

Costs that change with the level of production or business activity, including materials and labor that fluctuate with output.

Efficiency Variance

A measure in cost accounting used to assess the efficiency with which inputs are converted into outputs, often looking at differences in labor or material usage.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used as a measure for allocating labor costs to products or services.