Using more highly skilled direct labourers might affect which of the following variances?
A)direct materials price variance
B)direct labour efficiency variance
C)variable manufacturing overhead price variance
D)fixed manufacturing overhead variance

Question

Quizplus · Accepted Answer

Using more highly skilled direct labourers is likely to affect the direct labour efficiency variance. This variance measures the difference between the actual hours of direct labour used and the standard hours of direct labour allowed for the actual level of output. If more skilled direct labourers are used, the standard hours allowed for the actual level of output might change, and the actual hours used might be more efficient, resulting in a favourable variance. However, this would not affect the direct materials price variance, variable manufacturing overhead price variance, or fixed manufacturing overhead variance.

Using More Highly Skilled Direct Labourers Might Affect Which of the Following