A Favorable Labor Rate Variance Is Created When

question 2

Multiple Choice

A favorable labor rate variance is created when:

• A) actual labor hours worked exceed standard hours allowed.
• B) actual hours worked are less than standard hours allowed.
• C) actual wages paid are less than amounts that should have been paid for the number of hours worked.
• D) actual units produced exceed budgeted production levels.
• E) actual units produced exceed standard hours allowed.

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Definitions:

Marginal Revenue

The income enhancement from the sale of one more unit of a product or service.

Total Revenue

The total amount of money a company receives from selling its goods or services, calculated by multiplying the price by the quantity sold.

Total Revenue

The full amount of income generated by the sale of goods or services before any costs are deducted.

Price Per Unit

A measure that indicates the cost of a single unit of a product or service.