Question

Question 25)A company's production department was experiencing a high defect rate on the assembly line, which was slowing down production and causing wastage of valuable direct materials. The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate but was worried that the higher wages of these workers might negatively affect operating income. This would produce a(n)

A) Unfavorable direct materials cost variance

B)Unfavorable direct labor cost variance c)Unfavorable direct labor efficiency variance

D)Unfavorable direct materials efficiency variance

Question 29 )What does a favorable direct materials cost variance indicate?

A)The actual quantity of direct materials used was less than the standard quantity

B)The actual cost of deect materials purchased was Iess than the standard cost of drect materials purchased

c)The actual cost of drect materials purchased was eater than the standard cost of drect materials purchased

d)The actual quantity of drect materials used was eater than the standard quantity

Answer 1

25	An increase in the wage rate will improve the effeciency but will result in a negative Labor Rate variance
	Due to which the Labor cost variance will also have a negative effect.
	So Option B is answer
26	A favourable direct material cost variance means that the Actula cost of direct material is less than
	the standard cost of direct materials purchased
	So Option B is answer