Which of the Following Indicates an Input Is Being Overused

question 224

Multiple Choice

Which of the following indicates an input is being overused relative to the optimal level?

• A)MRP = P of input.
• B)MRP > P of input.
• C)MRP < P of input.
• D)MPP > P of output.

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Definitions:

Labour Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, based on the hours worked.

Direct Material Units

Refers to the physical units of raw materials that are directly traceable and integral to the finished product.

Standard Costing

A cost accounting method that assigns a fixed cost to inventory and measures any variances to actual costs.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected for the level of production achieved, often related to workforce productivity.