A Company Was Experiencing Slow Production Rates, and Lower Production

question 11

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 a(n) :

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

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Definitions:

Stress

A physical, mental, or emotional factor causing bodily or mental tension, stemming from any event or thought that makes one feel frustrated, angry, or nervous.

Psychological State

An individual's current mental condition, including their feelings, thoughts, and emotions, which can be influenced by various factors and may fluctuate.

Physical Health

A state of well-being of the body, free from illness, injury, or pain, often maintained through regular physical activity, balanced nutrition, and adequate rest.

General Adaptation Syndrome

A model describing the body’s stress response in three stages: alarm, resistance, and exhaustion.