Which of the following would produce a labor rate variance?
A)Poor quality materials causing breakage and work interruptions.
B)Use of persons with high hourly wage rates in tasks that call for low hourly wage rates.
C)Excessive number of hours worked in completing a job.
D)An unfavorable variable overhead rate variance.

Question

Quizplus · Accepted Answer

A labor rate variance occurs when labor is paid at a higher or lower rate than the standard rate. Using personnel with high hourly wage rates in tasks that call for low hourly wage rates would result in a labor rate variance. The other options listed would result in other types of variances (material usage variance, labor efficiency variance, variable overhead rate variance).

Which of the Following Would Produce a Labor Rate Variance