Bukowitz Inc. has a favorable direct labor rate variance. Which of the following would be the most likely reason for this variance?
A) The company used lower-paid workers in the production process more than they had expected.
B) Employees took a shorter amount of time to produce the product than expected.
C) The company used a standard direct labor rate that was too low.
D) Employees used less direct materials in the production process than expected.

Question

Quizplus · Accepted Answer

A favorable direct labor rate variance occurs when the actual rate paid for labor is less than the expected or standard rate. This can happen if the company uses lower-paid workers than initially planned, leading to lower labor costs.