Actual Direct Labor Costs May Differ from the Flexible Budget

question 120

Multiple Choice

Actual direct labor costs may differ from the flexible budget amounts because

• A)The company may set a standard wage rate,but the market forces may require a change in that rate.
• B)Employees do not always operate at the desired efficiency level.
• C)The company may set a standard wage rate,but the market forces may require a change in that rate or employees do not always operate at the desired efficiency level.
• D)None of these ans choices are correct.

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Definitions:

Lease Equipment

The process of renting machinery, vehicles, or other equipment for business use instead of purchasing them outright.

Lease-Purchase Analysis

Lease-Purchase Analysis is a financial evaluation to determine whether leasing or purchasing an asset is more cost-effective in the long term.

After-Tax Borrowing Rate

The interest rate on loans after taking into account the tax deductions on interest payments, affecting the net cost of borrowing.

Discount Rate

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis.