A new factory manager was hired for a company that was experiencing slow production rates and lower production volumes than demanded by management.Upon investigation,the manager found that the workers were poorly motivated and not closely supervised.Midway through the quarter,an incentive program was initiated,and cash bonuses were given when workers hit their production targets.Within a short time,production output increased,but the bonuses had to be charged to the direct labor budget.This could produce a(n)________.
A) unfavorable direct materials cost variance
B) unfavorable direct materials efficiency variance
C) favorable direct labor efficiency variance
D) favorable direct labor cost variance

Question

Quizplus · Accepted Answer

The incentive program led to increased production output by motivating workers to hit their production targets, which directly relates to labor efficiency. Thus, the situation described would likely result in a favorable direct labor efficiency variance, as workers are producing more within the same or less time.

A New Factory Manager Was Hired for a Company That