All of the following are possible causes of a favorable labor rate variance except:
A)a higher mix of unskilled workers causing hourly rates to be lower than anticipated.
B)product demand that was lower than expected causing a reduction in the amount of overhead initially anticipated.
C)a higher mix of skilled workers causing hourly rates to be higher than anticipated.
D)a new labor contract that was negotiated at lower pay rates than anticipated.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

A favorable labor rate variance occurs when the actual cost of labor is less than what was expected. A higher mix of skilled workers causing hourly rates to be higher than anticipated would lead to an unfavorable variance, not a favorable one, as it increases the cost of labor beyond what was planned.

All of the Following Are Possible Causes of a Favorable