Labor Variances and Responsibility Quiz

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Questions and Answers

What is the formula to calculate Labor Rate Variance (LRV)?

  • Actual Hours of Input x Standard Rate
  • Standard Hours Allowed x Standard Rate
  • Actual Hours of Input x Actual Rate (correct)
  • Standard Hours Allowed x Actual Output

What is the formula to calculate Labor Efficiency Variance (LEV)?

  • Standard Hours Allowed x Standard Rate
  • Standard Hours Allowed x Actual Output (correct)
  • Actual Hours of Input x Actual Rate
  • Actual Hours of Input x Standard Rate

In the context of the given information, what does a Favorable Variable Overhead Efficiency Variance (VOEV) indicate?

  • Efficiency is higher than expected (correct)
  • Costs are under control
  • Costs are not properly managed
  • Efficiency is lower than expected

What does a negative value for Variable Overhead Rate Variance (VORV) signify?

<p>Favorable variance (C)</p> Signup and view all the answers

If the Variable Overhead Efficiency Variance (VOEV) is Unfavorable, what does it suggest?

<p>Costs are not properly managed (D)</p> Signup and view all the answers

How can Total Flexible Variance be described based on the calculations provided?

<p>The difference between VORV and VOEV (B)</p> Signup and view all the answers

If the Labor Rate Variance (LRV) is Negative, what might be concluded?

<p>Higher labor costs than expected (C)</p> Signup and view all the answers

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