The Following Information Describes a Company's Usage of Direct Labor

question 73

Multiple Choice

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

• A) $28,000 unfavorable.
• B) $28,000 favorable.
• C) $45,000 unfavorable.
• D) $45,000 favorable.
• E) $17,000 unfavorablE.

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Definitions:

Double-Declining-Balance

An accelerated method of depreciation where an asset’s book value is reduced at double the rate of its straight-line depreciation.

Units-Of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on its usage or activity levels, rather than time.

Depreciation Expense

Depreciation expense is the allocated portion of the cost of a tangible asset that is expensed over its useful life, reflecting wear and tear, obsolescence, or loss of value.

Double-Declining-Balance

A method of accelerated depreciation which doubles the normal depreciation rate, reducing the value of an asset more quickly in its early years.