1.Labour efficiency variance is a part of
Material variance
Labour variance
Overhead variance
2.Efficiency variance arises due to:
Change in the rate of pay to labours
Change in the price of materials
Change in the actual and standard hours
3.Efficiency variance is obtained using the following formula:
(Actual hours – Standard hours) x Standard rate
Difference in rates x Standard hours
Difference in rates x Idle Time
4.Favorable efficiency variance means that:
Actual hours worked is greater than standard hours
Actual hours worked is less than standard hours
None of the above.
5.Adverse efficiency variance might arise due to:
Increase actual hours than anticipated
Incorrect standard was setup
All of the above.
6.Fast machine to complete the production early may lead to:
Adverse efficiency variance
Adverse rate variance
Favorable efficiency variance
- Standard cost: Labour 20,000 hours @ $2.66 per hour = $53,200/-; Actual cost: Labour 19,866 hours @ $2.84 per hour = 56,420/-. Labor efficiency variance will be:
$ 356 favorable
$ 356 adverse
$ 350 adverse
8.Rate variance is used to best utilize labor?
True
False
9.Rate variance is an effective tool to negotiate pay terms with employees and labor union.
Yes
No