A Company Would Most Likely Have an Unfavorable Labor Rate

question 164

Multiple Choice

A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if

• A)the mix of workers used in the production process was more experienced than the normal mix.
• B)the mix of workers used in the production process was less experienced than the normal mix.
• C)workers from another part of the plant were used due to an extra heavy production schedule.
• D)the purchasing agent acquired very high quality material that resulted in less spoilage.

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Definitions:

Market Value

The ongoing rate at which one can buy or sell an asset or service.

Weighted-Average

A method of calculating an average that takes into account the importance, or weight, of each value.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.

Book Value

The asset's recorded value on the balance sheet, determined by subtracting any depreciation or amortization from the asset's cost.