Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

The most likely explanation of the above direct manufacturing labor variances is that ________.
A) the average wage rate paid to employees was less than expected
B) employees did not work as efficiently as expected to accomplish the job
C) the company may have assigned more experienced employees this month than originally planned
D) management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency

Question

Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

The most likely explanation of the above direct manufacturing labor variances is that ________.

The most likely explanation of the above direct manufacturing labor variances is that ________.
A) the average wage rate paid to employees was less than expected 
B) employees did not work as efficiently as expected to accomplish the job 
C) the company may have assigned more experienced employees this month than originally planned 
D) management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency

Quizplus · Accepted Answer

The Answer of Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

The most likely explanation of the above direct manufacturing labor variances is that ________.
A) the average wage rate paid to employees was less than expected 
B) employees did not work as efficiently as expected to accomplish the job 
C) the company may have assigned more experienced employees this month than originally planned 
D) management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency

Handley Manufacturing Company Has Prepared the Following Flexible Budget for August