 Show MULTIPLE CHOICE: 1. Which of the following statements concerning standard costs is false? a. If properly used, standards can help motivate employees. b. All variances, whether favorable or unfavorable, should be investigated. c. Standard costs should be attainable under conditions of efficient operation. d. A standard cost system may be used with a process costing system or a job order costing system. 2. Standard costing is used to isolate the variances between standards costs and actual costs. It allows management to measure performance and correct inefficiencies, thereby helping to a. Allocate costs accurately. b. Determine the break-even point. c. Control costs. d. Eliminate management’s need for subjective decisions. 3. Both standard costs and budgeted costs are used for controlling costs. However, the two terms are not the same. Standard costs differ from budgeted costs in the standard costs a. Are based on the engineering studies while budgeted costs are historical costs. b. Costs that were incurred for actual production, while budgeted costs are costs that should have been incurred for such production. c. Are costs that should have been incurred for actual production, while budgeted costs are costs that should be incurred for budgeted or planned production. d. Are always expressed in total amounts, while budgeted costs are always expressed in per-unit amounts. 4. The difference between actual costs and standard cost is called a. Favorable variance c. variance b. Unfavorable variance d. variable 5. Which of the following statements is correct? a. A standard costs system can never be used in both the job order and process costing systems. b. Standard costing can be used in job order costing, but not in process costing system. What is the labor rate variance quizlet?The Labor Rate Variance is the difference between the actual and the expected cost of labor multiplied by the actual amount of hours worked.
What is the purpose of direct labor variance?Direct labor rate variance measures the cost of the difference between the expected labor rate and the actual labor rate. If the variance demonstrates that actual labor rates were higher than expected labor rates, then the variance will be considered unfavorable.
Which of the following is used to compute the labor rate variance?Answer and Explanation: The correct answer is option d. Actual costs - (Actual hours x Standard rate). Direct Labor Rate Variance is the difference between Actual cost and Standard cost for Actual hours.
Who has the main responsibility for a labor rate variance?The human resource department is the one responsible for the labor rate variance. Labor variance can be defined as where actuals cost of production is different from the labor cost that had been budgeted for.
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Which of the following is not true regarding the use of labor variance information?
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