A production scheduling error that results in the unanticipated use of overtime labor will result in an unfavorable labor rate variance.

Question

Quizplus · Accepted Answer

An unfavorable labor rate variance occurs when the actual labor rate paid is higher than the standard labor rate. Overtime labor is typically paid at a higher rate than regular labor, so using overtime labor will result in an unfavorable labor rate variance.

A Production Scheduling Error That Results in the Unanticipated Use