Direct Labor Variance is the difference between the total actual direct labor cost and total standard labor cost. To determine: Effect of poor-quality materials on direct labor variances Solution: There are two types of Direct labor variance: Direct labor rate variance Direct labor efficiency variance Poor quality of materials will not have an effect on the direct labor rate variance. However, poor quality of materials will cause excessive time taken by labor to work on the materials to produce the output. Hence, this leads to unfavorable labor efficiency variance. Conclusion: Thus, poor quality of materials causes unfavorable labor variance.

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