A company's production department was experiencing a high defect rate on the assembly line,which was slowing down production and causing a higher waste of valuable direct materials.The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate.This would produce a(n)________.
A) unfavorable direct materials cost variance
B) unfavorable direct labor cost variance
C) unfavorable direct labor efficiency variance
D) unfavorable direct materials efficiency variance

Question

Quizplus · Accepted Answer

Hiring highly skilled production workers from another company is likely to increase the wages paid, leading to an unfavorable direct labor cost variance because the actual labor costs would be higher than the standard or expected labor costs.

A Company's Production Department Was Experiencing a High Defect Rate