Kecks Bottling Company produces 2-liter soda bottles in its Somerset plant using an injection-molding machine that has a theoretical capacity of 60,480 bottles per week. For the most recently completed week, the company's capacity cost management system reported an efficiency waste variance of 3,144 bottles. This variance indicates that:
A) Demand for 2-liter bottles was less than normal.
B) All downtime for maintenance and process irregularities was within the unavoidable range.
C) The company experienced unexpected downtime on the machine for maintenance or other process irregularities.
D) The injection-molding machine consumed more than the standard quantity of raw material allowed for the level of production achieved.

Question

Quizplus · Accepted Answer

The efficiency waste variance indicates the difference between the theoretical capacity and the actual production, which in this case is due to unexpected downtime on the machine for maintenance or other process irregularities, leading to less production than the machine's capacity.

Kecks Bottling Company Produces 2-Liter Soda Bottles in Its Somerset