Choice "D" is correct. If machinery is inadequately maintained, there will be worker downtime for repairs. This will lead to an unfavorable efficiency variance.Note: This is a logical theory type question that makes sense when it is thought through.Choice "b" is incorrect. New labor contracts that increase wages would lead to unfavorable rate variances, not efficiency variances.Choice "a" is incorrect. Use of highly skilled workers should lead to a favorable efficiency variance because the workers are more proficient.
Choice "c" is incorrect. Raw materials of improved quality should lead to a favorable efficiency variance because the materials flow through the system easily and there would be less downtime and waste.