A 5 percent wage increase for all factory employees would affect which of the following variances?
A)direct materials price variance
B)direct labour rate variance
C)direct labour efficiency variance
D)variable manufacturing overhead efficiency variance

Question

Quizplus · Accepted Answer

The wage increase affects the direct labor rate variance, which measures the difference between the actual hourly wage rate and the standard hourly wage rate. A 5 percent increase in the hourly wage rate would increase the actual rate, resulting in an unfavorable variance. None of the other variances listed would be affected by a wage increase for all factory employees.

A 5 Percent Wage Increase for All Factory Employees Would