A favorable labor efficiency variance is created when:
A) actual labor hours worked exceed standard hours allowed.
B) actual hours worked are less than standard hours allowed.
C) actual wages paid are less than amounts that should have been paid.
D) actual units produced exceed budgeted production levels.
E) actual units produced exceed standard hours allowed.

Question

Quizplus · Accepted Answer

A favorable labor efficiency variance occurs when the actual hours worked are less than the standard hours allowed for the actual production level. This means the work was completed in less time than expected, indicating efficient labor usage.

A Favorable Labor Efficiency Variance Is Created When