A Direct-Labor Efficiency Variance Cannot Be Caused By

question 25

Multiple Choice

A direct-labor efficiency variance cannot be caused by:

• A) inexperienced employees.
• B) poor quality raw materials.
• C) employee inefficiency.
• D) an out-of-date labor time standard.
• E) producing fewer finished units than originally planned.

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Definitions:

Economic Inefficiencies

Situations where resources are not used optimally according to consumer preferences, often leading to wasted resources or unmet demands.

Product Variety

Refers to the different types and variations of products available in a market or offered by a company.

Excess Capacity

A scenario where a firm’s production capability exceeds the demand for its product, often leading to inefficiency and increased costs.

Product Variation

The process of making slight adjustments to a product's features, design, or offerings to differentiate it from competitors’ products.