ECONOMICS

Detailed explanation-1: -A favorable labor efficiency variance is not created when actual labor hours worked exceed standard hours allowed.

Detailed explanation-2: -If the actual rate of pay per hour is less than the standard rate of pay per hour, the variance will be a favorable variance. A favorable outcome means you paid workers less than anticipated.

Detailed explanation-3: -Answer and Explanation: The correct answer is C. Actual labor hours worked exceeded standard labor hours for the production level achieved. This indicates that the actual labor hours worked exceeded standard labor hours for the production level achieved.

Detailed explanation-4: -Labour Rate Variance (LRV) It is the difference between the standard and the actual direct Labour Rate per hour for the total hours worked.

Detailed explanation-5: -If actual labor hours are less than the budgeted or standard amount, the variable overhead efficiency variance is favorable; if actual labor hours are more than the budgeted or standard amount, the variance is unfavorable.