Question

Justin Co. recently purchased materials from a new supplier at a very attractive price. The materials were found to be of poor quality, and the company's laborers struggled significantly as they shaped the materials into finished product. In a desperation move to make up for some of the time lost, the manufacturing supervisor brought in more-senior employees from another part of the plant. Which of the following variances would have a high probability of arising from this situation?
a. Both Material Price variance, favorable and Labor rate variance, favorable
b. Material price variance, unfavorable.
c .Labor rate variance, unfavorable.
d. Material quantity variance, favorable.
e. Labor efficiency variance, favorable.

Answer 1

Answer:

C

Explanation:

more labor expense bringing in extras workers. Drives down the profits.