What does an unfavourable labour efficiency variance indicate?
A) The actual labour rate was higher than the standard labour rate.
B) The labour rate variance must also be unfavourable.
C) Actual labour hours worked exceeded standard labour hours for the production level achieved.
D) Overtime labour was used during the period.

Question

Quizplus · Accepted Answer

An unfavourable labour efficiency variance indicates that the actual labour hours worked were greater than the standard hours for the production achieved, meaning that more labour hours were used than necessary to produce the same output. This can be due to a variety of reasons, such as inefficient work methods or lack of training. Options A, B, and D do not necessarily indicate an unfavorable labour efficiency variance, and may indicate other types of variances.

What Does an Unfavourable Labour Efficiency Variance Indicate