Questions: Select all that apply When using a standard cost system, an undue emphasis on labor efficiency can create pressure to build excess inventory the most important objective for the company is to meet the standards employees may take unfavorable actions to ensure favorable variances

The answer is:

• an undue emphasis on labor efficiency can create pressure to build excess inventory
• employees may take unfavorable actions to ensure favorable variances

Explanation:

1. An undue emphasis on labor efficiency can create pressure to build excess inventory: This is correct. In a standard cost system, if there is too much focus on labor efficiency, employees might produce more than needed to show they are working efficiently. This can lead to excess inventory, which is not desirable as it ties up capital and can lead to increased storage costs and potential obsolescence.

2. The most important objective for the company is to meet the standards: This is not necessarily correct. While meeting standards is important, it is not the most important objective. The ultimate goal of a company is to achieve overall business objectives, which include profitability, customer satisfaction, and long-term sustainability. Focusing solely on meeting standards can lead to suboptimal decisions that do not align with broader business goals.

3. Employees may take unfavorable actions to ensure favorable variances: This is correct. In a standard cost system, employees might engage in behaviors that ensure they meet or exceed standards, even if those actions are not in the best interest of the company. For example, they might cut corners on quality or delay necessary maintenance to show favorable variances in cost or efficiency metrics.

In summary, undue emphasis on labor efficiency and the potential for employees to take unfavorable actions are valid concerns in a standard cost system.