A Favorable Direct Labor Efficiency Variance Might Indicate That

question 47

Multiple Choice

A favorable direct labor efficiency variance might indicate that

• A)higher skilled workers were used that performed the task slower than expected.
• B)higher skilled workers were used that performed the task faster than expected.
• C)lower skilled workers were paid a higher wage than expected.
• D)lower skilled workers were paid a lower wage than expected.

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Definitions:

Direct Labour-Hours

The total amount of hours worked by employees directly involved in the manufacturing process.

Manufacturing Overhead

Refers to all the indirect costs associated with the production process, excluding direct materials and direct labor.

Fixed Manufacturing

Costs associated with manufacturing that remain constant regardless of the level of production, such as salaries and lease payments.

Variable Manufacturing

Costs that vary directly with the level of production, such as raw materials or labor directly involved in making products.