A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if
A)the mix of workers used in the production process was more experienced than the normal mix.
B)the mix of workers used in the production process was less experienced than the normal mix.
C)workers from another part of the plant were used due to an extra heavy production schedule.
D)the purchasing agent acquired very high quality material that resulted in less spoilage.

Question

Quizplus · Accepted Answer

An unfavorable labor rate variance occurs when the actual rate paid is higher than the standard or expected rate, which can happen if a company uses more experienced (and therefore more expensive) workers than normal. A favorable labor efficiency variance occurs when less time is needed to complete work than expected, which experienced workers can achieve by working more efficiently.

A Company Would Most Likely Have an Unfavorable Labor Rate