Each Day Lea Works 7 Hours and Produces 9 Units

question 120

Multiple Choice

Each day Lea works 7 hours and produces 9 units of goods and services. Clara works 11 hours each day and produces 10 units of goods and services. It follows that

• A)Lea's productivity is higher than Clara's.
• B)Clara's productivity is higher than Lea's.
• C)Lea's income per hour will be higher than Clara's.
• D)Lea's income per day will be higher than Clara's.

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Definitions:

Direct Labor

Refers to the wages paid to workers who are directly involved in the production of goods or services.

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted or expected costs, indicating overhead management effectiveness.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as salaries of factory supervisors and rent of the manufacturing facility.

Materials Price Variance

The difference between the actual cost of raw materials and the standard cost multiplied by the quantity of materials purchased, used as a measure of cost control.