When auto manufacturer bmw purchased the rolls-royce brand name, bmw had to hire and train a new staff of assembly workers. the new workers were paid $25 per hour, worked a total of 7,500 hours, and produced 2,000 cars. bmw budgeted for a standard labor rate of $27 per hour and 1.25 direct labor hours per car. what is the direct labor efficiency variance for the rolls-royce division? a) $125,000 unfavorableb) $125,000 favorablec) $135,000 favorabled) $135,000 unfavorable

The correct answer is D: Direct labor variance= $135000 unfavorable.

Explanation:

Giving the following information:

The new workers were paid $25 per hour, worked a total of 7,500 hours, and produced 2,000 cars.

BMW budgeted for a standard labor rate of $27 per hour and 1.25 direct labor hours per car.

Direct labor variance= (SQ*AQ)*SP

SQ= standard quantity

AQ= actual quantity

SP= standard price

SQ= To produce 2000 cars, it will take 1.25*2000=2500 hours

AQ= 7500 hours

SP= $27

Direct labor variance= (2500-7500)*27= $135000 unfavorable.

It took a considerable amount of hours more than predicted.  

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.