Vito, Inc Had an Unfavorable Labor Efficiency Variance and an Unfavorable

question 70

Multiple Choice

Vito, Inc. had an unfavorable labor efficiency variance and an unfavorable materials quantity variance. Which department might be held accountable for these variances?

• A) Engineering
• B) Production only, because inefficient workers may use more materials than allowed.
• C) Marketing.
• D) Shipping.
• E) Both Purchasing, because bad materials can harm labor efficiency and Production, because inefficient workers may use more materials than allowed.

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Definitions:

Capital Contributions

Monetary or non-monetary assets provided by partners or shareholders to increase the capital of a partnership or corporation.

LLC

A limited liability company, which is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Distribution of Profits

The allocation of a company's earnings to its shareholders or owners, typically in the form of dividends.

Dissolution

The official termination of an entity's existence, such as a corporation or partnership, through legal processes.