At the End of 20x5, ELM Corporation's Production Manager Estimated

question 56

Multiple Choice

At the end of 20x5, ELM Corporation's production manager estimated direct labour overtime hours at 200 for the first quarter of 20x6. At the end of the first quarter, actual overtime hours totalled 180. This difference is most likely to lead to:

• A) Favourable variable overhead spending variance
• B) Unfavourable production volume variance
• C) Favourable labour efficiency variance
• D) Unfavourable labour efficiency variance

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Definitions:

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade.

Increased Unemployment

A rise in the percentage of the labor force that is without work but available for and seeking employment.

Social Security

A government program that provides financial assistance to people with an inadequate or no income, primarily the elderly, disabled, and unemployed.

Long-term Solvency

The ability of an entity, typically a government or business, to meet its long-term financial liabilities and obligations.