An Increase in the Likelihood of a Dismissal

question 7

Multiple Choice

An increase in the likelihood of a dismissal:

• A) raises productivity at an increasing rate.
• B) raises productivity at a decreasing rate.
• C) decreases productivity at a decreasing rate.
• D) decreases productivity at an increasing rate.

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Definitions:

Standard Quantity

The budgeted or pre-determined amount of material or input expected to be used during a manufacturing process.

Standard Hours Allowed

The time that should have been taken to complete the period’s output. It is computed by multiplying the actual number of units produced by the standard hours per unit.

Material Price Variances

The difference between the expected cost of materials and the actual cost incurred, useful in budgeting and cost management.

Labor Efficiency Variance

A measure used in cost accounting to gauge the difference between the actual hours taken to produce a good or service and the standard hours expected, multiplied by the standard labor rate.