The two components of the direct labor flexible budget variance are the
A)The direct labor price variance and the direct labor quantity variance.
B)The direct labor rate variance and the direct labor efficiency variance.
C)The direct labor rate variance and the direct labor standard variance.
D)The direct labor efficiency variance and the direct labor standard variance.

Question

Quizplus · Accepted Answer

The two components of the direct labor flexible budget variance are the direct labor rate variance and the direct labor efficiency variance. The direct labor rate variance measures the difference between the actual hourly rate paid and the standard hourly rate multiplied by the actual hours worked. The direct labor efficiency variance measures the difference between the actual hours worked and the standard hours allowed for the actual production multiplied by the standard hourly rate.

The Two Components of the Direct Labor Flexible Budget Variance