A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following?
A)Unskilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate
B)Unskilled workers using less actual hours than standard, paid a lesser rate per hour than the standard rate
C)Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate
D)Skilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate

Question

Quizplus · Accepted Answer

A favorable direct labor efficiency variance indicates that less actual hours were used than the standard hours. An unfavorable direct labor rate variance means that the actual hour rate paid was higher than the standard hour rate. Therefore, skilled workers who used less actual hours than standard but were paid at a higher rate per hour than the standard rate would result in this combination of variances.

A Favorable Direct Labor Efficiency Variance and an Unfavorable Direct