Which variance is directly impacted if the employees who build the product go on strike and temporary workers who are slower and not as skilled are hired?
A)Direct materials price variance
B)Direct materials quantity variance
C)Direct labor efficiency variance
D)Direct labor rate variance

Question

Quizplus · Accepted Answer

The direct labor efficiency variance is directly impacted when less skilled workers are hired, as they will likely take longer to complete the same amount of work as the skilled employees who are on strike. This will result in higher labor costs due to the additional time required to complete the same amount of work, leading to an unfavorable direct labor efficiency variance. Direct materials price variance and direct materials quantity variance are related to the cost and usage of materials, respectively, and are not affected by the hiring of temporary workers. Direct labor rate variance is impacted by changes in the wage rate paid to employees, which is not impacted by the hiring of temporary workers in this scenario.

Which Variance Is Directly Impacted If the Employees Who Build