The direct labor efficiency variance is caused by
A)lack of efficiency in preparing the budget.
B)using more or less direct labor than the standard allows.
C)setting a higher or lower wage standard than is practical.
D)paying more or less for direct materials than the standard allows.

Question

Quizplus · Accepted Answer

The direct labor efficiency variance is caused by using more or less direct labor than the standard allows. It measures the difference between the actual hours worked and the standard hours allowed for the actual level of output. A favorable variance occurs when less time is taken than expected, while an unfavorable variance occurs when more time is taken than expected. The other options listed do not directly relate to the direct labor efficiency variance.

The Direct Labor Efficiency Variance Is Caused by