If Management Experiences an Unfavorable Direct Materials Efficiency Variance, Which

question 172

Multiple Choice

If management experiences an unfavorable direct materials efficiency variance, which of the following would not be the possible corrective action?

• A) Improve the design of the product
• B) Provide additional training for the direct laborers
• C) Purchase higher quality materials
• D) Negotiate lower prices for material acquisition

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Definitions:

Noncurrent Asset

Assets intended for use over a long term, such as property, plant, and equipment, that are not expected to be converted into cash within a year.

Direct Write-Off Method

The direct write-off method is an accounting practice of charging unpaid debts directly to expense when they are deemed uncollectible, bypassing the allowance for doubtful accounts.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are collected, or turned over, during a reporting period.

Bad Debt Expense

An expense account reflecting amounts that are expected to be uncollectible from customers' credit sales.