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 recruit some highly skilled production workers from another company to bring down the defect rate,but was worried that the higher wages of these workers might negatively affect operating income.This situation would have produced a(n)_______

Question

Quizplus · Accepted Answer

The recruitment of highly skilled workers from another company is likely to improve the efficiency of the production process, resulting in a lower defect rate and reduced waste of materials. This would lead to a favorable direct labor efficiency variance, which is a measure of how efficiently the labor is being utilized in the production process. The higher wages paid to these workers may increase the total direct labor cost, but this would be offset by the savings from improved efficiency, resulting in a favorable overall cost variance. The other options (A, B and D) are not applicable to the given situation.

The Production of a Company Was Experiencing a High Defect