A Labor Efficiency Variance Resulting from the Use of Poor

question 132

Multiple Choice

A labor efficiency variance resulting from the use of poor quality materials should be charged to:

• A)the production manager.
• B)the purchasing agent.
• C)manufacturing overhead.
• D)the industrial engineering department.

---

Definitions:

Accounts Payable

Accounts payable represent a company's obligation to pay off a short-term debt to its creditors or suppliers, often arising from the purchase of goods or services on credit.

Merchandise Inventory

The value of a company's commodities or goods available for sale to customers at any given time.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, not continuously, often used in smaller businesses.

Purchases Returns and Allowances

Transactions where a buyer returns goods to the supplier or receives a reduction in the purchase price, reducing the amount owed to the supplier.