Which of the Following Could Not Be an Explanation of the Labour

question 44

Multiple Choice

Which of the following could not be an explanation of the labour efficiency variance for a firm whose variances for the period included an unfavourable material price variance and a favourable labour efficiency variance?

• A) Standards are out of date.
• B) If the unfavourable material price variance was due to better quality materials being purchased, this in turn could lead to less waste of materials.
• C) A timesaving improvement to the material-handling techniques has not yet been incorporated into the standard.
• D) Deliberate inefficiency.

---

Definitions:

Marginal Cost

The additional expenditure involved in producing one additional unit of a good or service.

Product X

A placeholder name typically used in economics and marketing to represent a generic product under consideration.

Resource Allocation

The process of assigning and distributing available resources to various uses in an economy, often in order to maximize efficiency or achieve a desired outcome.

Production Possibilities Curve

A graph that shows the maximum number of possible units a company can produce if it only produces two types of goods given a fixed amount of resources.