ECONOMICS

Detailed explanation-1: -The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period. An unfavorable materials quantity variance indicates that: actual usage of material exceeds the standard material allowed for output.

Detailed explanation-2: -1. Quantity standards. Quantity standards indicate how much of an input, such as labor time or raw materials, should be used in manufacturing a unit of product or in providing a unit of service. To measure performance, actual quantities used are compared to standard quantities allowed.

Detailed explanation-3: -Labour Efficiency Variance (LEV) It is the difference between the standard hours for the actual production achieved and the hours actually worked, valued at the standard labour rate.

Detailed explanation-4: -When the actual quantity used is less than the standard quantity, the variance is favorable. If the actual quantity used is higher than the standard quantity, the variance is unfavorable. Example: To produce product B, 100 units of A are expected as inputs.

Detailed explanation-5: -The correct answer is direct labor efficiency variance. If the difference of the actual hours and the standard hours allowed are calculated, the company can evaluate how efficient the production workers in manufacturing the products.