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Grand Canyon Food Products is famous for its frosted fruit cake. The main ingredient of the cake is ...

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Grand Canyon Food Products is famous for its frosted fruit cake. The main ingredient of the cake is ...

Grand Canyon Food Products is famous for its frosted fruit cake. The main ingredient of the cake is dried fruit, which Grand Canyon purchases by the pound. In addition, the production requires a certain amount of direct labor. Grand Canyon uses a standard cost system, and at the end of the first quarter, there was an unfavorable direct materials efficiency variance. Which of the following is a logical explanation for that variance?
A) The factory lost two experienced workers at the beginning of the quarter, and their replacements wasted a large amount of dried fruits during their training period.
B) The production staff changed the work flow process so that production required fewer direct labor hours.
C) The production manager negotiated a lower wage package for production staff, bringing direct labor costs down.
D) The purchasing manager was able to secure a volume discount on dried fruit, purchasing the fruit for less than the amount set by standard.

Textbook

Horngren's Financial & Managerial Accounting, The Financial Chapters

Edition: 5^th

Authors: Miller-Nobles, Mattison, Matsumura

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