COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following unfavorable variances would be directly affected by the relative position of a production process on a learning curve?
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material mix
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material price
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labor rate
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labor efficiency
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Explanation:
Detailed explanation-1: -An unfavorable variance means that labor efficiency has worsened, and a favorable variance means that labor efficiency has increased.
Detailed explanation-2: -Poor Estimates 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: B. The mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low-paid unskilled workers. An unfavorable labor rate variance arises when the standard price or labor rate is lower than than actual rate incurred.
There is 1 question to complete.