Which of the Following Is Not True Regarding the Use

question 194

Multiple Choice

Which of the following is not true regarding the use of labor variance information?

• A) The actual wage rate is almost always different from the standard rate.
• B) Unexpected overtime can cause variation in the labor rate.
• C) An average wage rate is chosen as the labor rate standard.
• D) The production manager controls the use of labor.
• E) The actual wage rate is used in determining the labor rate variance.

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Definitions:

Factory Overhead

All indirect costs associated with the manufacturing process, including utilities, depreciation, and wages for support staff that are not directly involved in production.

Direct Labor

The cost of wages and benefits for workers who are directly involved in the production of goods or the provision of services.

Finished Goods Inventory

Inventory of finished goods available for sale but not yet purchased by customers.

Factory Overhead

Indirect costs associated with manufacturing operations, such as utilities, maintenance, and salaries of supervisory personnel.