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.

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Definitions:

Real Salary

The purchasing power of an individual's income, taking into account the effect of inflation on spending power.

Nominal Salary

The amount of money earned by an employee before any deductions or adjustments for inflation.

Goods and Services

Physical products (goods) and intangible benefits (services) that fulfill consumers' needs or desires.

Nominal Wage

The wage paid to workers measured in current monetary units, without taking inflation into account.