An Unfavorable Direct Labor Rate Variance Indicates Which of the Following

question 146

Multiple Choice

An unfavorable direct labor rate variance indicates which of the following?

• A)Both Actual Quantity (AQ)and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output.
• B)The Actual Quantity (AQ)of direct labor hours worked exceeded the standard quantity of hours for actual output.
• C)The actual direct labor cost per hour exceeded the standard direct labor cost per hour for Actual Quantity (AQ)of direct labor hours.
• D)The actual cost of direct labor per hour was less than the standard cost of direct labor per hour.

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Definitions:

Product Costing

The process of determining all costs incurred to bring a product to market, including materials, labor, and overhead.

Quality Assurance

A systematic process designed to determine whether a product or service meets specified quality standards.

Traditional Product Costing Systems

Costing methods that typically allocate overhead costs based on a single volume-based cost driver, which may not accurately reflect the actual resources consumed by products.

Activity Rates

Predetermined charges used in activity-based costing to allocate costs to products or services based on the activities required for their production.