Question

Unfavorable labor rate variances may occur as a result of ______. work interruptions caused by faulty equipment overtime premiums being charged to the direct labor account unskilled workers being assigned to a task that requires a set of skills skilled workers being assigned to jobs requiring little skill

Answer 1

Answer:

• overtime premiums being charged to the direct labor account

• skilled workers being assigned to jobs requiring little skill.

Explanation:

Unfavorable labor rate variances occur when labor expenses supersede management expectations, thus causing cash flow problems, stagnation of profit, etc. It indicates that the cost of labor is way expensive than anticipated. A number of variations may cause such unfavorable variance. Some of them include staffing variance, pay premium, scheduling problem, etc. Identification of the cause can help to prevent their impact and or limit their impact.