ECONOMICS

Detailed explanation-1: -A credit balance in the labor inefficiency variance account indicates that standard rate and standard hours exceed actual rate and actual hours. A standard cost is a budget for the production of one unit of a product or service.

Detailed explanation-2: -Labor variances focus on both rates and hours, also called efficiency or quantity. The labor rate variance is found by computing the difference between actual hours multiplied by the actual rate and the actual hours multiplied by the standard rate.

Detailed explanation-3: -C. If the actual labor hours worked exceeded standard hours allowed is expressed as unfavorable labor efficiency variance.

Detailed explanation-4: -A debit balance in the labor-efficiency variance account indicates that: budget at actual levels of activity reached and fixed overhead applied. The production volume variance is computed by the difference between the: budgeted selling price multiplied by the actual number of units sold.

Detailed explanation-5: -If the actual direct labor cost per unit is higher than the standard direct labor cost per unit, it means that the company incurs more to produce one unit of a product than is expected, making the cost unfavorable to the business.