The correct answers are: Hiring of more highly skilled workforce; Higher quality material purchased; Workforce motivated to perform well with higher bonuses for efficiency.
The more highly skilled workforce is likely to operate more efficiently than the standard workforce, thus resulting in a favourable efficiency variance.
The purchase of higher quality material might result in less wastage of material and therefore less wastage of time in the production process which would give a favourable labour efficiency variance.
A workforce motivated to perform well with higher bonuses for efficiency will improve efficiency levels.
Out of date machinery resulting in delays in the production process would mean that labour would be less efficient, which would generate an adverse labour efficiency variance.
Over absorption of overheads does not explain a favourable variance for efficiency.
