A Labor Efficiency Variance Resulting from the Use of Poor

question 102

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 engineering department.

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Definitions:

Ratios

Financial metrics used to make comparisons between different aspects of a company's performance or financial position, to assess its health, efficiency, and profitability.

Basic Earning Power Ratio

A financial metric that indicates how well a company's assets are generating income before the effects of taxes and financing costs.

Financial Leverage

The extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure. If a high percentage of a firm’s capital structure is in the form of debt and preferred stock, then the firm is said to have a high degree of financial leverage.

Tax Effects

The impact of taxation on an individual's or company's financial decisions or situations, especially regarding how investments and financial strategies are structured.