Possible Operational Causes of an Unfavorable Direct Materials Efficiency Variance

question 139

True/False

Possible operational causes of an unfavorable direct materials efficiency variance include poor design of products or processes.

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Definitions:

Fixed Factors

Inputs or resources in the production process that cannot be easily increased or decreased in the short term, such as buildings and land.

Long Run

A period in which all inputs, including capital, are variable, allowing firms to adjust all factors of production.

Economic Costs

The comprehensive expense incurred from selecting one option over another, covering both direct and indirect costs.

Own Capital

The personal resources that an investor or business owner invests into a business venture.