Abita Manufacturing Has Prepared the Following Flexible Budget for October

question 36

Multiple Choice

Abita Manufacturing has prepared the following flexible budget for October and it is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

-The MOST LIKELY explanation of the above direct labor variances is that:

• A)the average wage rate paid to employees was less than expected.
• B)employees did not work as efficiently as expected to accomplish the job.
• C)the company may have assigned more experienced employees this month than originally planned.
• D)management may have a problem with budget slack and may be using lax standards for both labor wage rates and expected efficiency.

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Definitions:

Panel Paintings

Artistic works created on a flat panel made of wood, canvas, or other durable material, often used for depicting religious scenes or portraits from the Middle Ages onwards.

Painters' Guild

An association of artists, particularly painters, in a particular town or city, organized during the medieval and Renaissance periods for mutual support and the regulation of their craft.

Tommaso Portinari

A notable figure from the Italian Renaissance, best known for commissioning Hugo van der Goes' "Portinari Altarpiece."

Hugo van der Goes

A Flemish painter during the Northern Renaissance, best known for his Portinari Altarpiece.