In General, as the Amount of Labor Input Decreases, the Amount

question 128

Multiple Choice

In general, as the amount of labor input decreases, the amount of output

• A)increases.
• B)decreases.
• C)remains constant.
• D)decreases only if the capital stock also decreases.

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Definitions:

Rate Variance

The difference between the expected rate of return on a project or investment and the actual rate achieved.

Total Direct Labor Cost Variance

The difference between the actual cost of direct labor used in production and the expected (or standard) cost.

Materials Price Variance

The difference between the actual cost of materials and the expected cost at standard prices, indicating how much was saved or overspent.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, valued at the standard cost.