Final answer:
Unfavorable wage variances can have positive effects on profits when higher wages improve worker productivity, motivation, and reduce turnover and hiring costs, which aligns with the efficiency wage theory.
Step-by-step explanation:
The question asks how an unfavorable variance in wages can lead to a positive effect on profit. The concept in discussion is the efficiency wage theory, which suggests that higher wages can lead to increased productivity among employees.
Workers who are paid more than the market rate may work harder, motivated by the desire to keep their well-compensated jobs and avoid a drop in income.
This can result in lower turnover rates, saving costs on training and hiring. Furthermore, in response to higher wages, firms might invest in more or better machinery, leading to higher productivity with possibly fewer labor hours required.
Therefore, paying higher wages can sometimes be beneficial for the employer, eventually translating into higher profits due to increased worker productivity and lower hiring costs.