Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

An unfavorable labor efficiency variance can result from which of the following situations?

Using lower-skilled workers than expected

Producing more units than budgeted

Paying workers a higher wage rate than planned

Purchasing materials at a higher cost than standard

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Verified step by step guidance

Understand the concept of labor efficiency variance: It measures the difference between the actual hours worked and the standard hours allowed for the actual production level, multiplied by the standard labor rate.

Analyze the term 'unfavorable variance': An unfavorable labor efficiency variance occurs when more hours are worked than expected to produce the same output, indicating inefficiency.

Evaluate the options provided: Consider how each situation impacts the efficiency of labor usage. For example, using lower-skilled workers than expected may lead to inefficiency as they may take longer to complete tasks.

Eliminate irrelevant options: Producing more units than budgeted does not directly cause inefficiency; it may increase total hours worked but not necessarily lead to an unfavorable variance. Similarly, paying workers a higher wage rate affects labor rate variance, not efficiency variance. Purchasing materials at a higher cost impacts material cost variance, not labor efficiency.

Conclude that the correct situation leading to an unfavorable labor efficiency variance is 'Using lower-skilled workers than expected,' as this directly impacts the efficiency of labor usage.