Direct Labour Hour Is Often Assumed as the Sole Cost

question 162

Essay

Direct labour hour is often assumed as the sole cost driver in analyzing the total variable overhead cost variance into spending and efficiency variances.
Required:
a)Will direct labour cost ever be a better cost driver of variable overhead costs than direct labour hour? Explain
b)How is the standard variable overhead rate different from the standard labour rate in variance analysis? Explain.

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Definitions:

Alcohol

A psychoactive substance commonly found in beverages like beer, wine, and spirits, known for its intoxicating effects.

Brain

An organ located in the skull of vertebrates that is the control center for the nervous system, responsible for processing sensory information, regulating body functions, and facilitating cognition.

Reversed

To change something to its opposite direction, position, order, or condition.

Strength Training

A physical exercise regimen designed to improve muscular strength and endurance through resistance exercises.