Final answer:
An unfavourable labour rate variance combined with a favourable labour efficiency variance typically occurs when a company employs more experienced, higher-paid workers who are more efficient, offsetting their higher wages with increased productivity.
Step-by-step explanation:
The most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficiency variance is the mix of workers assigned to the particular job was heavily weighted towards the use of higher-paid, experienced individuals. This situation arises because, while the experienced workers command higher wages (contributing to an unfavourable labour rate variance due to higher costs per hour), they also tend to work more efficiently (leading to a favourable labour efficiency variance as they complete tasks in less time).
Firms may also respond to union demands for higher wages by adjusting their production methods to include more physical capital and less labour, increasing labour productivity. Union workers tend to have higher productivity than nonunion workers because higher wages can elicit higher productivity, and they usually have longer tenures at a job, reducing training and hiring costs for employers and leading to greater experience overall.
completed question:
Which of the following is the most probable reason a company would experience an unfavourable labour rate variance and a favourable labour efficiency variance? Multiple Choice The mix of workers assigned to the particulier job was heavily weighted towards the use of higher paid experienced individuals The mix of workers assigned to the particular job was heavily weighted towards the use of now, relatively low paid united workers Because of the production schedule, workers from other production areas were assigned to assist this particular process Defective materials caused more about to be used in order to produce a standard unt