If the Actual Average Wage Rate Is $4

question 27

Multiple Choice

If the actual average wage rate is $4.50 per direct labor hour, but the standard wage rate is $4.70 per direct labor hour, the direct labor

• A)efficiency variance will be favorable.
• B)efficiency variance will be unfavorable.
• C)rate variance will be favorable.
• D)rate variance will be unfavorable.

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Definitions:

Reasonable Reliance

A principle where a party acts based on the representation or promise of another, believing it to be true.

Bilateral Contract

An agreement involving two parties where each promises to perform an act in exchange for the other's act.

Unilateral Contract

A contract where one party makes a promise in exchange for an act by another party, which upon performance, binds the first party to its promise.

Promissory Estoppel

A law that stops someone from going back on a commitment they've made to another if the second party has trusted this promise to their own disadvantage.