An increase in the direct labor rate as a result of union negotiations would most likely impact which
Of the following variances?
A) Direct labor efficiency variance
B) Direct labor price variance
C) Direct labor quantity variance
D) Sales volume variance

Question

Quizplus · Accepted Answer

An increase in the direct labor rate due to union negotiations directly affects the cost of labor per hour, which is a price issue, thus impacting the direct labor price variance. This variance measures the difference between the actual labor rate paid and the standard labor rate expected.

An Increase in the Direct Labor Rate as a Result