If a Company Uses More Direct Labor Hours Than the Standard

question 142

Multiple Choice

If a company uses more direct labor hours than the standard allowed,the result is

• A)an inflated prepaid salary account on the balance sheet.
• B)an unfavorable direct labor hour variance.
• C)a favorable efficiency variance.
• D)a reduction in operating income.

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Definitions:

Efficiency

The ability to accomplish a task or produce a desired outcome with the least amount of waste, expense, or unnecessary effort.

Information

Data processed or stored by a system, person, or organization that is useful for making decisions or solving problems.

Schema

A cognitive framework or concept that helps organize and interpret information, based on one's accumulated knowledge and experience.

Existing Schema

A cognitive framework or concept that helps organize and interpret information based on known ideas and experiences.