1. Relevant information for direct labor is as follows:

Actual hours worked…………840

Actual wage………………….$15.25

Standard hours allowed……820

Standard wage…………….$15.50

What was the direct labor efficiency variance?

a. $305 favorable

b. $305 unfavorable

c. $310 favorable

d. $310 unfavorable

2. Which of the following is the most likely explanation for an unfavorable materials usage variance and a favorable labor wage variance?

a. The new labor contract increased wages.

b. Higher quality materials were purchased, resulting in less waste.

c. The company experience labor turnover and newer, less experienced workers were hired.

d. A new supplier offered a lower price for materials.