ECONOMICS

Detailed explanation-1: -The correct answer is c. Labor rate variance = No; Materials quantity variance = Yes. Poorly trained workers are the reason for the unfavorable material quantity variance as unskilled workers will not handle the available quantity of products properly.

Detailed explanation-2: -If estimated labor costs are lower than they should be due to unreliable historical trends, inherent employee bias or any other reason, actual labor prices may be significantly higher, causing an unfavorable variance from the budgeted amount.

Detailed explanation-3: -Answer and Explanation: Purchasing a poor quality of materials will only affect both the direct materials price variance and direct materials quantity variance. The price variance will result in a favorable variance, considering that lower quality of materials are purchased at lower cost.

Detailed explanation-4: -Followings are some of the reasons that lead to unfavorable direct labor efficiency difference or variance: The hiring of inexperienced labor leads to unfavorable labor efficiency as it requires a company to spend more on labor and labors take more time in producing goods.