An unfavourable labour efficiency variance indicates that
A) standard hours exceed actual hours.
B) actual hours exceed standard hours.
C) standard rate times standard hours exceeds actual rate times actual hours.
D) actual rate exceeds standard rate.

Question

Quizplus · Accepted Answer

An unfavourable labour efficiency variance occurs when actual hours exceed standard hours, which means the actual output of labour is lower than expected based on the standard hours allowed for the actual output level. This can be due to a variety of factors, such as poor training, equipment issues, or inefficient processes.

An Unfavourable Labour Efficiency Variance Indicates That