Berman's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.
Flexible Variances
Budget Price Efficiency
Material A $ $F $U
Material B U F
Direct manufacturing labor U F
The most likely explanation of the above direct manufacturing labor variances is that
Question options:
management may have a problem with budget slack and might be using lax standards for both laborwage rates and expected efficiency
the company may have assigned more experienced employees this month than originally planned
employees did not work as efficiently as expected to accomplish the job
the average wage rate paid to employees was less than expected
