The Direct Labor Efficiency Variance Is Caused by

question 96

Multiple Choice

The direct labor efficiency variance is caused by

• A)lack of efficiency in preparing the budget.
• B)using more or less direct labor hours than the standard allows.
• C)setting a higher or lower wage standard than is practical.
• D)paying more or less than the standard allows for total labor costs.

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Definitions:

Unit Sales

The quantity of items that have been sold within a particular timeframe.

JIT Policy

Just-In-Time policy, a strategy that aims to improve a business's return on investment by reducing in-process inventory and related carrying costs.

Variable Overhead

Costs that vary with the level of output or production activity, such as materials and labor.

Fixed Overhead

Expenditures that are consistent and independent of production or sales volume, like rent, salaries, and insurance.