If the actual labor hours worked exceed the standard labor hours allowed, what type of variance will occur?
A) Favorable labor efficiency variance.
B) Favorable labor rate variance.
C) Unfavorable labor efficiency variance.
D) Unfavorable labor rate variance.

Question

Quizplus · Accepted Answer

If the actual labor hours worked exceed the standard labor hours allowed, it indicates that more labor hours have been used than what was originally planned for the given level of production. This results in an unfavorable labor efficiency variance, as the company has incurred additional labor costs without producing additional output.

If the Actual Labor Hours Worked Exceed the Standard Labor