The Production Manager of a Company, in an Effort to Gain

question 171

Multiple Choice

The production manager of a company, in an effort to gain a promotion, negotiated a new labor contract with her factory employees that required them to bear a greater percentage of benefit costs than before, thus bringing down the cost of direct labor to the company. Shortly afterward, several experienced and highly skilled workers resigned, and were replaced by new employees whose work was very slow during their training period. At the end of the quarter, the company's profits fell 10%. This situation would have produced a(n) :

• A)favorable direct materials cost variance.
• B)unfavorable direct labor cost variance.
• C)unfavorable direct labor efficiency variance.
• D)favorable direct materials efficiency variance.

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Definitions:

Production Employees

Workers directly involved in manufacturing goods or providing services in industries such as automotive, electronics, textiles, and food processing.

Machine Job

Work that involves operating or overseeing machinery in a manufacturing process or industrial setting.

Custom Parts

Specially designed components made to fit specific products or systems, unlike standard parts, they are created to meet unique requirements or specifications.

Aptitude Tests

Tests that assess how well a person can learn or acquire skills and abilities.