Which of the Following Is Not a Reason That Actual

question 175

Multiple Choice

Which of the following is not a reason that actual direct labor costs may differ from the flexible budget amounts?

• A)The purchasing manager resigned and a higher-paid replacement was hired.
• B)After the company set the standard wage rate,the union reached an agreement that required a pay raise for all factory workers.
• C)Because the air conditioner in the factory was not working properly,workers did not work as efficiently in the hot afternoons as expected.
• D)All of these ans choices are correct.

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Definitions:

Labor Rate Variance

The discrepancy between what labor actually costs and what was initially budgeted or considered as the standard labor cost.

Actual Results

The real outcomes or data obtained from an operation or process, often compared against planned or forecasted results.

Standard Cost System

A method of cost accounting that compares actual costs to predetermined standards, facilitating variance analysis to manage costs.

Standard Amount

The budgeted or pre-determined cost of materials, labor, and overhead that is used as a benchmark for actual costs.