Question

Unlike direct materials, the sum of all the direct labor variances is always equal to the flexible budget variance.

A. True
B. False

Answer 1

A. True

Step-by-step explanation:

Unlike direct materials, the sum of all the direct labor variances is always equal to the flexible budget variance. Also, a negative direct labor efficiency variance is considered favorable one. And for a direct labor, if the efficiency and rate variances are both negative, then the flexible budget variance will be unfavorable. Therefore, the statement of the question is true.