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Variances will arise if actual outcomes are different from the expected or budgeted outcomes. For a direct labor efficiency variance, the variance could occur when:
Variances will arise if actual outcomes are different from the expected or budgeted outcomes. For a direct labor efficiency variance, the variance could occur when: the supplier's price increased due to inflation. the number of hours it takes employees to complete each unit of product was less than the standard time allowed. direct labor workers were inexperienced, and used more materials than expected. the wages paid to employees were higher than expected due to the increase in the minimum wage rate forced by the state government
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