When Managers Investigate a Direct Labor Efficiency Variance, They Are

question 57

Multiple Choice

When managers investigate a direct labor efficiency variance, they are trying to

• A)place blame on the person responsible for the variance.
• B)understand why workers took a longer or shorter amount of time than expected to produce a product.
• C)find out which workers were paid more than the standard rate.
• D)determine the total cost of labor for production

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Definitions:

Net Present Value

A calculation used to assess the profitability of an investment by summing the present values of its expected cash flows minus the initial investment cost.

Financial Instruments

Agreements resulting in one party acquiring a financial asset while the opposite party incurs a financial liability or issues an equity instrument.

Derivative

A contract that changes value in response to an underlying variable, requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, and is settled at a future date.

Primary

Refers to being of first importance; main or most significant in terms of consideration or development.