At the end of 20x1, ELM Corporation's production manager estimated direct labor overtime hours at 200 for the first quarter of 20x2. At the end of the first quarter, actual overtime hours totaled 180. This difference is most likely to lead to
A) Favorable variable overhead spending variance
B) Unfavorable production volume variance
C) Favorable labor efficiency variance
D) Unfavorable labor efficiency variance

Question

Quizplus · Accepted Answer

The actual overtime hours were less than estimated, indicating that labor was more efficient than expected, leading to a favorable labor efficiency variance.

At the End of 20x1, ELM Corporation's Production Manager Estimated