The production of a company was experiencing a high defect rate on the assembly line,which was slowing down the production and causing wastage of valuable materials.The production manager decided to purchase a higher grade of material that would be more reliable,but he was worried that the cost of the new material might negatively affect operating income.This situation would have produced a(n)________.

Question

Quizplus · Accepted Answer

The situation described suggests that the production manager is looking to improve the quality of the materials used in production, which should lead to fewer defects and less wasted material. This would result in a favorable direct materials efficiency variance, as the company would be using less of the higher-quality materials than initially budgeted. The other options (favorable direct materials cost variance, unfavorable direct labor cost variance, and unfavorable direct labor efficiency variance) are not directly related to the situation as described.

The Production of a Company Was Experiencing a High Defect