A Favourable Variable Manufacturing Overhead Efficiency Variance May Be Interpreted

question 52

Multiple Choice

A favourable variable manufacturing overhead efficiency variance may be interpreted as meaning which of the following if machine hours are the cost allocation base?

• A)Employees used too much electricity during production.
• B)Improved quality of materials resulting in less downtime to clean the machines of debris.
• C)Excess supplies were used.
• D)Too much of the cost driver was used.
• E)The cost driver is inappropriate.

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Definitions:

Self-Directed Work Teams

Groups of employees who work together without traditional managerial supervision to achieve specified goals and objectives.

Ownership

Ownership is the legal right or title to an asset or property, giving the owner control over its use and disposition.