Which Statement Best Describes Direct Labour Variances

question 112

Multiple Choice

Which statement best describes direct labour variances?

• A) The labour rate and labour efficiency variances will always add up to the total labour variance.
• B) The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid.
• C) The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used.
• D) The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used.

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Definitions:

Inventory Analysis

The examination of inventory to determine the optimal stock levels, turnover rates, and ordering practices.

Mathematical Forecasting

The process of making predictions about future events based on mathematical models and statistical techniques.

Factors of Production

The inputs required for the production process, including land, labor, capital, and entrepreneurship.

Tight Bureaucracy

A highly structured organizational form with strict rules, procedures, and a clear hierarchy of authority.