(Appendix 10B)What Does a Credit Balance in a Direct Labour

question 54

Multiple Choice

(Appendix 10B) 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) The 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.

---

Definitions:

Objective Value

The perceived worth of a good or service based on its ability to fulfill a need or want, as opposed to subjective personal preferences.

Opportunity Cost

The cost of foregone alternatives, representing the benefits that could have been received by choosing the next best alternative.

Subjective Values

The personal importance or worth that an individual places on a good or service, which can vary greatly between people.

Time Costs

The opportunity costs associated with the time spent on an activity instead of other, potentially more valuable, activities.