Asked by Giovanni Magana on Jul 28, 2024
Verified
A favourable labour efficiency variance would result in a credit balance in the labour
efficiency variance account.
Labour Efficiency Variance
The difference between the actual hours worked and the standard hours expected to produce a certain level of output, valued at the standard labour rate.
Credit Balance
An account balance that shows money owed to the account holder, often indicating a creditor position in financial records.
- Acquire knowledge on the rationale and computation process for labor rate and efficiency variances.
Verified Answer
CF
Clandistine FurtiveJul 30, 2024
Final Answer :
True
Explanation :
A favourable variance indicates that the actual costs were less than the standard costs, leading to a credit balance in the variance account.
Learning Objectives
- Acquire knowledge on the rationale and computation process for labor rate and efficiency variances.