31) The production manager of a company, in an effort to gain a promotion, negotiated a new labor contract with her factory employees that required them to bear a greater percentage of benefit costs than before, thus bringing down the cost of direct labor to the company. Shortly afterward, several experienced and highly skilled workers resigned, and were replaced by new employees whose work was very slow during their training period. At the end of the quarter, the company's profits fell 10%. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Favorable labor price variance
C) Favorable labor efficiency variance
D) Unfavorable materials efficiency variance
32) The production manager of a company, in an effort to gain a promotion, negotiated a new labor contract with her factory employees that required them to bear a greater percentage of benefit costs than before, thus bringing down the cost of direct labor to the company. Shortly afterward, several experienced and highly skilled workers resigned, and were replaced by new employees whose work was very slow during their training period. At the end of the quarter, the company's profits fell 10%. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Unfavorable labor price variance
C) Unfavorable labor efficiency variance
D) Favorable materials efficiency variance
33) The production manager of a company was experiencing high defect rate on the assembly line, which was slowing production and causing wastage of valuable materials. He decided to purchase a higher grade of material which would be more reliable, but he was worried that the cost of the new material might negatively impact operating income. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Favorable labor price variance
C) Favorable labor efficiency variance
D) Unfavorable materials efficiency variance
34) The production manager of a company was experiencing high defect rate on the assembly line, which was slowing production and causing wastage of valuable materials. He decided to purchase a higher grade of material which would be more reliable, but he was worried that the cost of the new material might negatively impact operating income. This situation could have produced which of the following variances?
A) Favorable materials price variance
B) Unfavorable labor price variance
C) Unfavorable labor efficiency variance
D) Favorable materials efficiency variance
35) The production manager of a company was experiencing high defect rate on the assembly line, which was slowing production and causing wastage of valuable materials. He decided recruit some highly skilled production workers from another company to bring down the defect rate, but he was worried that the higher wages of these workers might negatively impact operating income. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Unfavorable labor price variance
C) Unfavorable labor efficiency variance
D) Unfavorable materials efficiency variance
36) The production manager of a company was experiencing high defect rate on the assembly line, which was slowing production and causing wastage of valuable materials. He decided recruit some highly skilled production workers from another company to bring down the defect rate, but he was worried that the higher wages of these workers might negatively impact operating income. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Favorable labor price variance
C) Favorable labor efficiency variance
D) Unfavorable materials efficiency variance
37) A company was experiencing slow production rates, and lower production volumes than demanded by management, so a new factory manager was hired. Upon investigation, she found that the workers were poorly motivated and not closely supervised. Midway through the quarter, she started an incentive program and paid out cash bonuses when workers hit their production targets. Within a short time, production output increased, but the bonuses had to be charged to the direct labor budget, and she was worried about the impact of these costs on operating income. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Unfavorable materials efficiency variance
C) Unfavorable labor efficiency variance
D) Unfavorable labor price variance
38) A company was experiencing slow production rates, and lower production volumes than demanded by management, so a new factory manager was hired. Upon investigation, she found that the workers were poorly motivated and not closely supervised. Midway through the quarter, she started an incentive program and paid out cash bonuses when workers hit their production targets. Within a short time, production output increased, but the bonuses had to be charged to the direct labor budget, and she was worried about the impact of these costs on operating income. This situation could have produced which of the following variances?
A) Unfavorable materials price variance
B) Unfavorable materials efficiency variance
C) Favorable labor efficiency variance
D) Favorable labor price variance
39) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows:
Materials: 1.5 pounds per unit; $4.00 per pound
Labor:2.0 hours per unit; $18.00 per hour
During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $29,750. The direct materials efficiency variance was $2,000 F. Which of the following would be a logical explanation for this variance?
A) The company used fewer labor hours than allowed by standards.
B) The company paid a lower rate for labor than allowed by standards.
C) The company used a lower quantity of materials than allowed by standards.
D) The company paid a lower price for the materials than allowed by standards.