The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. Which ONE of the following sentences is the best interpretation of this result? ... OA. The department has introduced new methods of working and there have been overtime payments to compensate for extra hours of working OB. A machine was not working, leading to idle time for which the employees should not be blamed OC. A lower grade of employee has been employed compared with the grade used for the budget, but the employees have taken a longer time to complete the work required OD. The union has negotiated higher-than-expected pay increases

The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. Which ONE of the following sentences is the best interpretation of this result? ... OA. The department has introduced new methods of working and there have been overtime payments to compensate for extra hours of working OB. A machine was not working, leading to idle time for which the employees should not be blamed OC. A lower grade of employee has been employed compared with the grade used for the budget, but the employees have taken a longer time to complete the work required OD. The union has negotiated higher-than-expected pay increases

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Description: The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. WhichONE of the following sentences is the best interpretation of this result?CO A. The department has

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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.

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Question

The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. Which
ONE of the following sentences is the best interpretation of this result?
C
O A. The department has introduced new methods of working and there have been overtime payments to compensate for extra hours of working
OB. A machine was not working, leading to idle time for which the employees should not be blamed
C. A lower grade of employee has been employed compared with the grade used for the budget, but the employees have taken a longer time to
complete the work required
D. The union has negotiated higher-than-expected pay increases

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