An unfavorable direct labor cost variance occurs when a company: Group of answer choices Incurs more direct labor costs per unit than the standard direct labor cost per unit. Hires employees at a wage rate less than the standard rate. Pays more wages per hour than the standard rate. Uses more hours per unit of output than it should have used.

An unfavorable direct labor cost variance occurs when a company: Group of answer choices Incurs more direct labor costs per unit than the standard direct labor cost per unit. Hires employees at a wage rate less than the standard rate. Pays more wages per hour than the standard rate. Uses more hours per unit of output than it should have used.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 20MCQ: An unfavorable volume variance can occur because a. too much finished goods inventory was held. b....

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What are some possible reasons for a direct labor time variance? A. utility usage decrease B. less qualified workers C. office supplies spending D. sales decline
What are some possible reasons for a labor rate variance? A. hiring of less qualified workers B. an excess of material usage C. material price increase D. utilities usage change
1. If demand is insufficient to keep everyone busy and workers are not laid off, which of the following labor efficiency variance often will be a result: A) favorable. B) unfavorable. C) zero. D) either favorable or unfavorable 2. A/an ______________ materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period. A) favorable. B) unfavorable. C) zero. D) either favorable or unfavorable 3. When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at: A) replacement cost B) standard cost C) absorption cost D) actual cost 4.When more hours of labor time are necessary to complete a job than the standard allows, the labor efficiency variance is A) favorable. B) unfavorable. C) zero D) either favorable or unfavorable.
A firm follows labour hours to allocate fixed overhead. A positive volume variance occurs a. When managers controlled fixed overhead during the period b. When employees turned more productive c. When actual labour hours is less than budgeted labour hours d. When actual labour hours is more than budgeted labour hours
An adverse labour efficiency variance together with a favourable labour rate variance could suggest that? a) The business is paying a higher hourly rate than standardb) More products are being made per hourc) Less labour hours are needed to make the same amount of output d) Less skilled staff are being used in production
An unfavorable labor rate variance is created when: Multiple Choice actual labor hours worked exceed standard hours allowed. actual hours worked are less than standard hours allowed. actual wages paid are less than amounts that should have been paid. actual units produced exceed budgeted production levels. actual wages paid exceed amounts that should have been paid for the number of hours worked.
Which of the following is the most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficency variance? O Defective materials caused more labour to be used in order to produce a standard unit. The mix of workers assigned to production was heavily weighted towards the use of new, relatively low-paid, unskilled workers. The mix of workers assigned to production was heavily weight towards the use of higher paid, experienced individuals. Because of the production schedule, workers from other production areas were assigned to assist this particular process.
1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful? 2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why. 3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.
A company that uses standard costing Group of answer choices a. shows the same per-unit cost of inventory each month. b. shows higher incomes than it would if it used actual costing. c. always has a volume variance unless normal capacity and practical capacity are the same. d. must make only one product.
Akao Products uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In the first quarter, Akao had an unfavorable efficiency variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance? A. The actual number of direct labor hours was lower than the budgeted hours. B. The actual number of direct labor hours was higher than the budgeted hours. C. The actual variable overhead costs were higher than the budgeted costs. D. The actual variable overhead costs were lower than the budgeted costs.
Which of the following statements is true for a company that uses variable costing? Multiple Choice paved The manufacturing cost per unit decreases when the volume of production increases. Net income is affected by fluctuations in production. Fixed manufacturing overhead is treated like a period cost. Fixed manufacturing overhead costs incurred in the current period may be recognized as expense in a later perioc
All of the following are possible causes of a favorable labor rate variance except: a lower mix of skilled workers causing hourly rates to be lower than anticipated. a new labor contract that was negotiated at lower pay rates than anticipated. a lower mix of unskilled workers causing hourly rates to be higher than anticipated. product demand that was lower than expected causing a reduction in the amount of overtime initially anticipated.