Dabney Inc. has a favorable direct labor efficiency variance. Which of the following would be the most likely reason for this variance?
A) The company used lower-paid workers in the production process more than they had expected.
B) Employees took a shorter amount of time to produce the product than expected.
C) The company used a standard direct labor rate that was too low.
D) Employees used less direct materials in the production process than expected.

Question

Quizplus · Accepted Answer

A favorable direct labor efficiency variance means that the actual labor hours used were less than the standard labor hours allowed for the production of a given quantity of output. Option B is the most likely reason for this, as it means that employees were able to produce the product more quickly than expected, resulting in fewer labor hours used. The other options are not related to direct labor efficiency variance.