The Production Manager of a Company,in an Effort to Gain

question 188

Multiple Choice

The production manager of a company,in an effort to gain a promotion,negotiated a new labor contract with the factory employees that required them to bear a greater percentage of benefit costs than before,thus bringing down the cost of direct labor to the company.Shortly afterward,several experienced and highly skilled workers resigned and were replaced by new employees whose work was very slow during their training period.At the end of the quarter,the company's profits fell 10%.This would produce a(n) ________.

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

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Definitions:

NSF Check

Stands for Non-Sufficient Funds Check, which is a check that cannot be processed because the writer’s account does not have enough funds.

Outstanding Checks

Checks that have been written and recorded in the issuing account but have not yet been cashed or cleared by the bank.

Checks Outstanding

Checks outstanding refer to checks that have been written and recorded in accounting books but have not yet been cashed or cleared by the bank.

Deposits In Transit

Funds that have been received and recorded by a company but have not yet been recorded by the bank.