All of the following are possible causes of a favorable labor rate variance except: a lower mix of skilled workers causing hourly rates to be lower than anticipated. a new labor contract that was negotiated at lower pay rates than anticipated. a lower mix of unskilled workers causing hourly rates to be higher than anticipated. product demand that was lower than expected causing a reduction in the amount of overtime initially anticipated.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
All of the following are possible causes of a favorable labor rate variance except:
a lower mix of skilled workers causing hourly rates to be lower than anticipated.
a new labor contract that was negotiated at lower pay rates than anticipated.
a lower mix of unskilled workers causing hourly rates to be higher than anticipated.
product demand that was lower than expected causing a reduction in the amount of overtime initially anticipated.
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