Listed Below Are Five Variances (And Possible Causes) That Are

question 44

Multiple Choice

Listed below are five variances (and possible causes) that are under review by management of Knox Company. Which of the following is least likely to cause the variance indicated?

• A) The need to ship goods acquired from a distant supplier via FedEx rather than via truck; material price variance.
• B) The need to complete goods on a timely basis during a period of high absenteeism; labor rate variance.
• C) A work-team that is very unhappy with its supervisor; labor efficiency variance.
• D) The need to close a plant for two days because of blizzard conditions; material quantity variance, part no. 542.
• E) A malfunctioning piece of manufacturing equipment; labor efficiency variance.

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Definitions:

Term Deposit

A bank deposit with a fixed term and interest rate, where the money must remain deposited for a specified duration, incurring penalties for early withdrawal.

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Insurance Proceeds

The money received by an insured party from an insurance company to cover a claim.

Accounts Payable

Liabilities owed by a business to its creditors for goods and services purchased on credit, which are due within a short period.