Use the Following Data to Find the Direct Labor Efficiency

question 131

Multiple Choice

Use the following data to find the direct labor efficiency variance if the company produced 3,500 units during the period.

• A) $6,125 unfavorable.
• B) $7,000 unfavorable.
• C) $7,000 favorable.
• D) $12,250 favorable.
• E) $6,125 favorable.

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Definitions:

Differentiated Products

Products that are distinguished from similar products by unique characteristics, branding, or quality, allowing companies to compete beyond price.

Perfectly Competitive

A descriptor of a market scenario where firms face many competitors, sell identical products, and have no control over the market price, leading to optimal efficiency and resource allocation.

Short Run

A time period in which at least one input, like plant size, is fixed and cannot be changed by the firm.

Price Taker

A market participant that accepts the prevailing market price and does not have the power to influence it.