An unfavorable direct labor rate variance indicates which of the following?
A)Both Actual Quantity (AQ)and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output.
B)The Actual Quantity (AQ)of direct labor hours worked exceeded the standard quantity of hours for actual output.
C)The actual direct labor cost per hour exceeded the standard direct labor cost per hour for Actual Quantity (AQ)of direct labor hours.
D)The actual cost of direct labor per hour was less than the standard cost of direct labor per hour.

Question

Quizplus · Accepted Answer

An unfavorable direct labor rate variance means that the actual cost per hour of direct labor exceeded the standard cost per hour for the actual quantity of direct labor hours worked. This could be due to factors such as higher wage rates or inefficient use of labor. Option A refers to both quantity and cost variances being unfavorable, while option B only mentions a quantity variance. Option D describes a favorable direct labor rate variance.

An Unfavorable Direct Labor Rate Variance Indicates Which of the Following