QUESTION 33 A company has an unfavorable direct labor rate variance and a favorable direct labor efficiency variance. What is the most likely explanation for this pair of variances? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) THE T I.

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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.