Direct labour efficiency variance =
A(Standard hours allowed for actual output − Actual hours worked) × standard rateCORRECT
B(Standard rate − Actual rate) × actual hours
CActual hrs × actual rate
DStandard hrs × standard rate
ACCAPerformance Management
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Toaster Teacher
Why the answer is A, and why the others tempt you.
Labour efficiency variance = (SH − AH) × SR. Positive means workers were faster than standard.
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