A Favorable Labor Efficiency Variance Is Created When

question 38

Multiple Choice

A favorable labor efficiency variance is created when:

• A) actual labor hours worked exceed standard hours allowed.
• B) actual hours worked are less than standard hours allowed.
• C) actual wages paid are less than amounts that should have been paid.
• D) actual units produced exceed budgeted production levels.
• E) actual units produced exceed standard hours allowed.

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Definitions:

Profit Increase

The rise in the difference between a company's revenue and its expenses, indicating improved financial performance.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the cost per unit of output.

Maximum Profit

The highest possible financial gain that can be achieved by a business or investor, calculated by maximizing the difference between total revenue and total costs.

Yellowfin Tuna

A species of tuna known for its yellow fins and high nutritional value, often used in sashimi and other dishes.