Even If a Product Is Safe for Ordinary Use, a Producer

question 199

True/False

Even if a product is safe for ordinary use, a producer may be held strictly liable in tort for not telling consumers of possible dangers associated with improperly using the product.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead cost incurred and the expected (standard) cost, based on the actual level of activity.

Direct Labor Standards

The expected labor time and cost that should be incurred under normal conditions to produce a unit of output.

Labor Rate Variance

The difference between the actual cost of direct labor and the estimated cost of direct labor at standard rates for the production achieved.

Labor Efficiency Variance

The difference between the actual hours worked to produce goods and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor use.