When a change in the manufacturing process reduces the number of direct labor hours and the standards are unchanged, the resulting variance will be * a favorable usage variance an unfavorable labor usage variance an unfavorable labor rate variance a favorable labor rate variance
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
When a change in the manufacturing process reduces the number of direct labor hours and the standards are unchanged, the resulting variance will be *
a favorable usage variance
an unfavorable labor usage variance
an unfavorable labor rate variance
a favorable labor rate variance
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