Which of the following is the most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficiency variance?
A) the mix of workers assigned to the particular job was heavily weighted towards the use of higher paid,experienced individuals.
B) the mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid,unskilled workers.
C) because of the production schedule,workers from other production areas were assigned to assist this particular process.
D) defective materials caused more labour to be used in order to produce a standard unit.

Question

Quizplus · Accepted Answer

An unfavourable labour rate variance means that the actual wage rate paid to workers was higher than the standard rate, while a favourable labour efficiency variance indicates that the actual amount of labour hours used was lower than the standard hours for the same amount of output. This could happen if the company used more highly paid and experienced workers (resulting in a higher labour rate) but they were able to complete the work faster (resulting in fewer labour hours).

Which of the Following Is the Most Probable Reason a Company