Efficiency Wages

question 309

Multiple Choice

Efficiency wages

• A)increase productivity and reduce unemployment.
• B)increase productivity but increase unemployment.
• C)decrease productivity but reduce unemployment.
• D)decrease productivity and increase unemployment.

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Definitions:

Direct Labor-hours

Represents the total hours of labor directly involved in manufacturing a product or delivering a service.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, typically based on hours of labor or machine hours.

Quantity Standard

A predetermined measure of the amount of input that should be used in the production of a single unit of product or service.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected (or standard) amount based on efficient operations.