Which of the following statements might cause a labor efficiency variance? Statement 1 – Hiring of workers with pay higher than that assumed when the standard for a job was set. Statement 2 – Lack of training for workers Group of choices: None of the statements Statement 1 only Statement 2 only Both Statement
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.
- Which of the following statements might cause a labor efficiency variance?
Statement 1 – Hiring of workers with pay higher than that assumed when the standard for a job was set.
Statement 2 – Lack of training for workers
Group of choices:
None of the statements
Statement 1 only
Statement 2 only
Both Statement
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