The production manager of a company,in an effort to gain a promotion,negotiated a new labor contract with the 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 would have produced a(n)________.

Question

Quizplus · Accepted Answer

The situation described in the scenario resulted in experienced and highly skilled workers resigning and their replacements taking longer to become efficient. This would lead to an unfavorable direct labor efficiency variance, as it would result in a higher cost of labor per unit produced. The other options listed are not relevant to the scenario.

The Production Manager of a Company,in an Effort to Gain