An unfavorable labor efficiency variance is created when:
A) actual labor hours worked exceed standard hours allowed.
B) actual hours worked are less than standard hours allowed.
C) actual wages paid are less than amounts that should have been paid.
D) actual units produced exceed budgeted production levels.
E) actual units produced exceed standard hours allowed.

Question

Quizplus · Accepted Answer

An unfavorable labor efficiency variance occurs when the actual labor hours worked exceed the standard hours allowed for the actual production level. This means that it took more time than expected to produce the goods, indicating inefficiency in labor use.

An Unfavorable Labor Efficiency Variance Is Created When