If the Labour Efficiency Variance Is Unfavourable, Then

question 35

Multiple Choice

If the labour efficiency variance is unfavourable, then

• A)actual hours exceeded standard hours allowed for the actual output.
• B)standard hours allowed for the actual output exceeded actual hours.
• C)the standard rate exceeded the actual rate.
• D)the actual rate exceeded the standard rate.

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Definitions:

Explicit Costs

are direct, out-of-pocket payments for expenses incurred by a business or individual.

Revenues

The total income generated by a company or organization from its activities, before any expenses are subtracted.

Economic Profit

The difference between the total revenues received by a business and the total opportunity costs of all resources used in the production.

Accounting Profit

The net income of a business as calculated by subtracting total expenses from total revenues, according to standard accounting practices.