COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Frequent breakdown is not likely to be a reason of unfavorable direct labor rate variance
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Yes
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No
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Explanation:
Detailed explanation-1: -Answer and Explanation: B) Low-quality materials. No, this will cause materials quantity variance, but normally not direct labor variances.
Detailed explanation-2: -Direct Labor Rate Variance If the variance demonstrates that actual labor rates were higher than expected labor rates, then the variance will be considered unfavorable. If the variance demonstrates that actual labor rates were lower than expected labor rates, then the variance will be considered favorable.
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