ELM Introduced a New Automated Production Process That Has Reduced

question 63

Multiple Choice

ELM introduced a new automated production process that has reduced the amount of labour needed, but not affected the use of materials. The standard cost system has not been changed yet to reflect this new process. Assuming the machinery is functioning properly and that workers were properly trained in its use, which of the following variances is most likely to result?

• A) Favorable variable overhead spending variance
• B) Favorable direct labor efficiency variance
• C) Unfavorable direct labor efficiency variance
• D) Favorable direct materials price variance

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Definitions:

Solid Foods

Foods that are not liquid or pureed, typically introduced to infants between 4 to 6 months of age as they develop the necessary oral and motor skills.

Rice Cereal

Rice cereal is a type of food often used as one of the first solid foods introduced to babies due to its easy digestibility.

Strained Beef

Cooked beef that has been processed or modified to remove excess liquid or fibers, often for dietary or culinary purposes.

Glycemic Index

A measure that ranks foods according to their impact on blood glucose levels.