What is the variance when actual direct labor hours worked exceed standard direct labor hours allowed for production?
AUnfavorable Labor Rate Variance
BFavorable Labor Efficiency Variance
CFavorable Labor Rate Variance
DUnfavorable Labor Efficiency Variance
Explanation
* When Actual Hours > Standard Hours allowed, the Labor Efficiency Variance is Unfavorable (cost exceeds standard allowance).
* If actual rate paid per hour exceeds standard rate, Labor Rate Variance is Unfavorable.
Exam Relevance
- Topic: Cost Accounting
- Subtopic: Variance Analysis
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