When China Builds a Dam Using Few Machines and a Great

question 397

Multiple Choice

When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions.

• A) "what"
• B) "how"
• C) "where"
• D) "for whom"

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Definitions:

Direct Materials Purchases Variance

The difference between the actual cost of direct material purchases and the expected (or standard) cost, adjusted for volume purchased.

Standard Costs

Predetermined costs for materials, labor, and overhead used in budgeting and assessing performance.

Labor Efficiency Variance

A measure of the difference between the actual hours worked by employees and the standard hours expected to complete a task, used to assess labor productivity.

Direct Labor Standards

These standards define the amount of time and the rate of pay anticipated for direct labor required to manufacture a product or provide a service.