Question

A favorable efficiency variance for direct manufacturing labor indicates that ________.

A) a lower wage rate than planned was paid for direct labor
B) a higher wage rate than planned was paid for direct labor
C) less direct manufacturing labor-hours were used during production than planned for actual output
D) more direct manufacturing labor-hours were used during production than planned for actual output

Answer 1

A favorable efficiency variance for direct manufacturing labor indicates that less direct manufacturing labor-hours were used during production than planned for actual output.

Step-by-step explanation:

A favorable efficiency variance for direct manufacturing labor indicates that C) less direct manufacturing labor-hours were used during production than planned for actual output.

A favorable efficiency variance means that less labor was used than planned for the actual output. This can be due to factors like increased productivity, improved processes, or better utilization of resources. It suggests that the production process was more efficient than expected.

For example, if the planned labor hours for a production process were 100 hours but only 80 hours were used to achieve the same level of output, there would be a favorable efficiency variance.