Vincent Bassani has come to the accounting department for help in interpreting his variance report. He says that he understands that last month was not a very good one for output but he really thought everyone put forth good effort so he is confused about the existence of an unfavorable labor efficiency variance. He cites as an example of the workers' effort their willingness to work extra hours to get full output even when a whole week's worth of production had to be scrapped. He knew that his materials costs would be higher and that overtime would make his rate variance unfavorable but he certainly didn't think his workers had been inefficient.
Required:
Write a short note to Vincent explaining the probable cause of the unfavorable labor efficiency variance.

Question

Quizplus · Accepted Answer

The Answer of Vincent Bassani has come to the accounting department for help in interpreting his variance report. He says that he understands that last month was not a very good one for output but he really thought everyone put forth good effort so he is confused about the existence of an unfavorable labor efficiency variance. He cites as an example of the workers' effort their willingness to work extra hours to get full output even when a whole week's worth of production had to be scrapped. He knew that his materials costs would be higher and that overtime would make his rate variance unfavorable but he certainly didn't think his workers had been inefficient.
Required:
Write a short note to Vincent explaining the probable cause of the unfavorable labor efficiency variance.

Vincent Bassani Has Come to the Accounting Department for Help