Question

During a recent strike at Morton Manufacturing, management replaced striking assembly workers with office workers. The assembly workers had been paid $19 per hour while the office workers are only paid $12 per hour. What is the most likely effect on the labor variances in the first month of this strike

Answer 1

Answer:

The labour rate variance for the month for Morton would be unfavorable because the actual rate of $19 per hour is greater tha the standard rate of $12.

Also, their might some efficiency variances, if the office workers are more or less skilled than the assembly workers

Explanation:

The labor rate variance would be unfavorable by the the amount paid in excess of the usual standard rate multiplied by the number of hours paid for in the month

The labor rate variance is the difference between the standard labor cost allowed for the actual hours worked and the actual labor cost for the same hour.

labor

Also, their might some efficiency variances, if the office workers are more or less skilled than the assembly workers