Vista Mfg.'s July production involved actual direct labor costs of $46,287 for 3,700 direct labor hours. The budget for the July level of production called for 3,800 direct labor hours at $12.50 per hour, using a standard cost system.

17. Refer to the information above. With respect to labor costs, Vista/>'s production manager is responsible for:

		A) Any labor rate variance as well as any labor efficiency variance.
		B) Only a labor rate variance.
		C) Only a labor efficiency variance.
		D) Only unfavorable labor variances.

Vista/>'s labor rate variance for July is:Answer

		A) $1,250 favorable.
		B) $1,213 favorable.
		C) $37 unfavorable.
		D) $1,213 unfavorable.

Vista/>'s labor efficiency variance for July is:Answer

		A) $1,250 favorable.
		B) $1,190 favorable.
		C) $1,213 unfavorable.
		D) $37 unfavorable.

Which of the following is the most likely explanation for the types of labor variances resulting from Vista/>'s July operations?Answer

		A) Management used highly skilled workers who received a higher wage but also worked more efficiently.
		B) Management reduced the wage rates in July, which caused the workers to deliberately slow down productivity.
		C) Management used less experienced workers whose lower wage rate more than offset their lower productivity.
		D) Management paid workers more than standard hourly rates, but the excess pay did not result in increased productivity.