When a Company Faces a Shortage of Employees in the Workforce,and

question 81

Multiple Choice

When a company faces a shortage of employees in the workforce,and it predicts that current demand for products or services may not extend to the future,it will

• A)try to garner more hours out of the existing labor force.
• B)recruit and train new employees.
• C)be willing to hire part-time employees.
• D)decrease the production rate by half to meet quality standards.
• E)lease out its machinery to other factories,thereby maintaining income.

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Definitions:

Variable Manufacturing Overhead

Costs in the manufacturing process that vary with the level of production output, such as utilities or indirect materials, but do not directly correlate to specific units of production.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated, based on the actual activity level.

Variable Overhead Standards

The predetermined costs associated with variable overheads that are expected to be incurred under normal operating conditions.

Direct Labor-hours

The total hours worked directly on manufacturing a product or providing a service, used as a basis for allocating labor costs in product costing.