A Company Was Experiencing Slow Production Rates, and Lower Production

question 153

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) Favorable labor efficiency variance
• D) Favorable labor price variance

Understand the foundational concepts and theories in human relations.

Identify key figures and their contributions to the field of human relations.

Comprehend the role and impact of group dynamics in organizational settings.

Recognize the significance of self-esteem and self-awareness in personal and professional development.

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Definitions:

Target's Management

The executive and leadership team of a company that is being considered for acquisition or merger.

Acquiring Company

A corporation that purchases most or all of another company's shares to gain control of that company.

Consolidation

The process of combining multiple accounts or businesses into a single entity for reporting purposes.

Legal Entities

Organizations that have legal rights and responsibilities, including the ability to enter into contracts, sue, and be sued; examples include corporations, governments, and non-profit organizations.