Sugar and Spice Foods is famous for its cupcakes.One of the main ingredients of the cupcakes is sugar,which Sugar and Spice purchases by the pound.In addition,the production requires a certain amount of direct labor.Sugar and Spice uses a standard cost system,and at the end of the first quarter,there was a favorable direct labor efficiency variance.Which of the following is a logical explanation for that variance?
A) The cost of workers' medical insurance plans jumped up dramatically during the quarter.
B) The factory lost two experienced workers at the beginning of the quarter, and their replacements wasted a large amount of direct materials during their training period.
C) The purchasing manager was able to secure a volume discount on dried fruit, purchasing the sugar for less than the amount set by standard.
D) The production staff changed the work flow process so that production required fewer direct labor hours than the standards allowed.

Question

Quizplus · Accepted Answer

A favorable direct labor efficiency variance means that less time was used to produce the same amount of goods than what was expected by the standard. This could have happened if the production staff changed the work flow process so that production required fewer direct labor hours than the standards allowed. None of the other options are related to direct labor efficiency.

Sugar and Spice Foods Is Famous for Its Cupcakes