Using more direct labor hours for units produced than the amount allowed by the standard results in:
A)An unfavorable total labor variance.
B)An unfavorable labor efficiency variance,regardless of the wage rate paid to employees.
C)An unfavorable labor efficiency variance only if the wage rate is higher than standard cost allowed.
D)A favorable labor rate variance,because the hourly wage rate is automatically reduced when workers operate less efficiently.

Question

Quizplus · Accepted Answer

Using more direct labor hours for units produced than the amount allowed by the standard results in an unfavorable labor efficiency variance. This variance measures the difference between the actual hours worked and the hours that should have been worked based on the standard allowed for the production of units. It is independent of the wage rate paid to employees.

Using More Direct Labor Hours for Units Produced Than the Amount