A Company Was Experiencing Slow Production Rates, and Lower Production

question 19

Multiple Choice

A company was experiencing slow production rates, and lower production volumes than demanded by management, so a new factory manager was hired. Upon investigation, she found that the workers were poorly motivated and not closely supervised. Midway through the quarter, she started an incentive program and paid out cash bonuses when workers hit their production targets. Within a short time, production output increased, but the bonuses had to be charged to the direct labor budget, and she was worried about the impact of these costs on operating income. This situation could have produced which of the following variances?

• A) Unfavorable materials price variance
• B) Unfavorable materials efficiency variance
• C) Unfavorable labor efficiency variance
• D) Unfavorable labor price variance

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Definitions:

Privacy

The right of individuals to keep their personal information out of public view and to make choices about how their personal information is used.

Convulsion

An abrupt, involuntary muscle contraction often associated with a sudden electrical discharge in the brain, leading to uncontrolled body movements.

Brain Malfunctions

Disorders or dysfunctions in the brain leading to various symptoms like memory loss, impaired judgement, or physical impairments.

Involuntary Contractions

Muscle contractions that occur without the conscious control of the person, such as muscle spasms or reflex actions.