Question

Which of the following is not true regarding the use of labor variance information? a.The actual wage rate is almost always different from the standard rate. b.Unexpected overtime can cause variation in the labor rate. c.An average wage rate is chosen as the labor rate standard. d.The actual wage rate is used in determining the labor rate variance. e.The production manager controls the use of labor.

Answer 1

Answer:

Option A is false statement among these.

The actual wage rate is almost always different from the standard rate

Explanation:

The actual wage rate paid and standard rate established can be different causing the labour rate variance.

Direct labour cost variance is the difference between the standard cost for actual production and the actual cost in production. There are two kinds of labour variances. Labour Rate Variance is the difference between the standard cost and the actual cost paid for the actual number of hours.