Tightly budgeted machine time standards can lead to unfavorable variable overhead efficiency variance.

Question

Quizplus · Accepted Answer

Tightly budgeted machine time standards can lead to pressure on workers to rush through work, resulting in lower quality products and an unfavorable variable overhead efficiency variance. This is because the actual amount of machine time used may differ from the budgeted amount due to lower productivity and higher scrap or rework rates.

Tightly Budgeted Machine Time Standards Can Lead to Unfavorable Variable