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Q.1 Which of the following may give rise to adverse labpur cost variance?
a. Idle time
b. Overtime working
C. Low productivityAnswer is given all of the above three may give rise labour cost variance. Is it correct john sir?
Q.2 which of the following may give rise to adverse labour rate variance?
a. Idle time
b. Overtime working
C. Low poductivityAnswer is given as “a” only. Is it correct ? As i was about to chose option a and b..
Thanx.
Q1 Yes – the answer is correct. The question is not asking about the labour rate variance, but the labour cost variance (which is the total labour variance). All three would increase the total labour cost.
Q2 The correct answer is ‘b’ only. Idle time and productivity do not affect the rate paid per hour.
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