Question

A​ company's production department was experiencing a high defect rate on the assembly​ line, which was slowing down production and causing a higher waste of valuable direct materials. The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate. This would produce​ a(n) ________. A. unfavorable direct materials cost variance B. favorable direct labor cost variance C. unfavorable direct materials efficiency variance D. favorable direct labor efficiency variance

Answer 1

Option D

This would produce​ a(n) Favorable direct labor efficiency variance

Explanation:

The direct labor efficiency variance relates to the variance that occurs due to the variation within the standard and actual time utilized to compose finished products.

 If operators produce a specified amount of units in a measure of time that is shorter than the measure of time provided by standards for that quantity of units, the variance is identified as favorable direct labor efficiency variance. There is favorable direct labor efficiency variance when the exact hours applied is less than the expected or usual hours.