The Following Data Were Compiled from Job Cost Sheets for Similar

question 125

Multiple Choice

The following data were compiled from job cost sheets for similar products: Based on the trends you can observe in the data, which of the following is likely true?

• A)Production processes are becoming more efficient.
• B)Increased production efficiencies are exactly offsetting increased labor costs.
• C)Increased labor costs are outweighing increases in production efficiencies.
• D)In the wake of increasing labor costs, management needs to address production inefficiencies.

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Definitions:

Variances

The differences between expected and actual figures in budgeting and accounting, which can indicate over or under performance.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected cost under standard costing.

Raw Materials

Basic materials that are used in the production process of manufacturing goods, which are then converted into finished products.

Standard Cost

A predetermined cost of manufacturing, labor, and material as estimated in accordance with standards set by the company.