The two components of the direct labor flexible budget variance are the
A)the direct labor price variance and the direct labor quantity variance.
B)the direct labor rate variance and the direct labor efficiency variance.
C)the direct labor rate variance and the direct labor standard variance.
D)the direct labor efficiency variance and the direct labor standard variance.

Question

Quizplus · Accepted Answer

The direct labor flexible budget variance is made up of two components: the direct labor rate variance and the direct labor efficiency variance. The rate variance measures the difference between the actual rate paid to workers and the standard rate that was expected, while the efficiency variance measures the difference between the actual time taken by workers to complete a task and the standard time that was expected. Therefore, option B is correct.

The Two Components of the Direct Labor Flexible Budget Variance