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Roman Mfg.'s July production involved actual direct labor costs of $46,287 for 3,700 direct labor hours.The budget for the July level of production called for 3,800 direct labor hours at $12.50 per hour,using a standard cost system.
-With respect to labor costs,Roman's production manager is responsible for:
A)Any labor rate variance as well as any labor efficiency variance.
B)Only a labor rate variance.
C)Only a labor efficiency variance.
D)Only unfavorable labor variances.

Question

Quizplus · Accepted Answer

The production manager is typically responsible for both the labor rate variance, which is the difference between the actual hourly wage paid and the standard or expected hourly wage, and the labor efficiency variance, which is the difference between the actual hours worked and the standard hours expected for the level of production. This is because the production manager oversees both aspects of labor: how much workers are paid (rate) and how efficiently they work (efficiency).

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