A Company Was Experiencing Slow Production Rates, and Lower Production

question 11

Multiple Choice

A company was experiencing slow production rates, and lower production volumes than demanded by management, so a new factory manager was hired. Upon investigation, she found that the workers were poorly motivated and not closely supervised. Midway through the quarter, she started an incentive program and paid out cash bonuses when workers hit their production targets. Within a short time, production output increased, but the bonuses had to be charged to the direct labor budget, and she was worried about the impact of these costs on operating income. This situation could have produced a(n) :

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

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Definitions:

Vocalizations

The act of producing sound or voice through the movement of the vocal cords, an essential form of communication in humans and other species.

Developmental Needs

Refers to the requirements necessary for the physical, emotional, cognitive, and social growth of individuals at various stages of their lives.

Controlling Parenting

A parenting style characterized by high demands and low responsiveness, where parents dictate many aspects of their children's lives.

Subsistence Levels

The minimum levels of resources required by an individual or population to maintain basic health and life.