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• A) Standards are out of date.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.

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Definitions:

Equilibrium Market Wage

The wage rate at which the quantity of labor supplied matches the quantity of labor demanded.

Bricklayers

Skilled workers who lay bricks to construct and repair walls, partitions, arches, and other structures.

Masonry Firm

A company specializing in the building and construction of structures using bricks, stone, concrete blocks, and other masonry materials.

Marginal Product

The extra production resulting from the use of an additional unit of a specific input, like labor or capital.