Question

LO 8.5Which of the following is a possible cause of an unfavorable labor rate variance?

hiring too many workers
hiring higher-quality workers at a higher wage
making too many units
purchasing too much material

Answer 1

hiring higher-quality workers at a higher wage

Step-by-step explanation:

Possible causes of unfavorable labor rate variances include:

An increase in pay for employees.

Working overtime hours paid at a premium above the basic rate.

Using direct labor employees who were more skilled and experienced than the ‘normal’ and who are paid more than the standard rate per hour (adverse rate variance).

Based on the above discussion, the answer is hiring higher-quality workers at a higher wage