A favorable direct labor efficiency variance might indicate that A. lower skilled workers were paid a lower wage than expected. B. lower skilled workers were paid a higher wage than expected. C. higher skilled workers were used that performed the task slower than expected. D. higher skilled workers were used that performed the task faster than expected.

Question

Business

Adyson Noble

2 November, 16:20

A favorable direct labor efficiency variance might indicate that A. lower skilled workers were paid a lower wage than expected. B. lower skilled workers were paid a higher wage than expected. C. higher skilled workers were used that performed the task slower than expected. D. higher skilled workers were used that performed the task faster than expected.

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Kassidy Dunlap · Answer 1

D. higher skilled workers were used that performed the task faster than expected.

Explanation:

Labor efficiency variance gives the relationship between the number of direct labor hours you budgeted and the actual hours worked for by the staff.

A favorable direct labor efficiency variance might indicate that higher skilled workers were used that performed the task faster than expected and thus resulting in higher profits.