What Does a Credit Balance in a Direct Labour Efficiency

question 154

Multiple Choice

What does a credit balance in a direct labour efficiency variance account indicate?

• A) The average wage rate paid to direct labour employees was less than the standard rate.
• B) The standard hours allowed for the units produced were greater than actual direct labour hours used.
• C) Actual total direct labour costs incurred were less than standard direct labour costs allowed for the units produced.
• D) The number of units produced was less than the number of units budgeted for the period.

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Definitions:

Unearned Revenue

Money received by a company for services or products which have not yet been delivered or performed.

Advance Subscription Sales

Revenue received from customers for subscriptions that are paid for before the subscription period begins.

Quarterly Journals

Publications that release issues on a quarterly basis, often academic or professional in nature, covering specific field subjects.

Journalized

Refers to the process of recording financial transactions in the chronological order of their occurrence in a company's journal, which is a primary accounting record.