This variance may be advantageous or disadvantageous, much like the direct labor rate variance. Favorable direct labor efficiency variance is the term used to describe a situation where workers make a particular number of units in less time than is permitted by standards for that number of units.
This variance may be advantageous or disadvantageous, much like the direct labor rate variance. Favorable direct labor efficiency variance is the term used to describe a situation where workers make a particular number of units in less time than is permitted by standards for that number of units.
Like direct labor rate variance, this variance may be favorable or unfavorable. If workers manufacture a certain number of units in an amount of time that is less than the amount of time allowed by standards for that number of units, the variance is known as favorable direct labor efficiency variance. On the other hand, if workers take an amount of time that is more than the amount of time allowed by standards, the variance is known as unfavorable direct labor efficiency variance.
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