The Production Manager of CLR Corporation Calculated a Material and Unfavourable

question 79

Multiple Choice

The production manager of CLR Corporation calculated a material and unfavourable variance of $4,000 with respect to the cost of direct materials. Which of the following is a likely next step for the production manager?

• A) Identify and discipline the responsible employee
• B) Take actions to prevent the variance from recurring
• C) Ascertain the cause of the variance
• D) Switch suppliers for direct materials

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Definitions:

Direct Labor

This refers to the wages paid to employees who are directly involved in the production of goods or services.

Automation

The use of technology to perform tasks without human intervention, often leading to increased efficiency and accuracy.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production.

Fixed Costs

Costs that remain constant in total regardless of changes in the volume of activity within certain limits of capacity.