A Favorable Price Variance for Direct Manufacturing Labor Might Indicate

question 44

Multiple Choice

A favorable price variance for direct manufacturing labor might indicate that:

• A)employees were paid more than planned
• B)budgeted price standards are too tight
• C)underskilled employees are being hired
• D)an efficient labor force

Interpret the significance of effective and nominal interest rates in financial decisions.

Calculate present and future values of specific amounts under given interest rates and time periods.

Distinguish between different types of annuities and their respective valuations.

Understand the concept of compound interest and calculate future values of investments compounded at different periods.

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Definitions:

Variable Manufacturing

Costs in manufacturing that change in proportion to the volume of production, such as materials and labor.

Materials Price Variance

The difference between the actual cost of materials used in production and the budgeted cost of materials, based on standard prices and actual quantities purchased.

Variable Manufacturing

Costs in manufacturing that vary directly with the level of production, such as raw materials and direct labor costs.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, based on a certain activity level.