Quality Brand Products Uses Standard Costing to Manage Their Direct

question 43

Multiple Choice

Quality Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Quality Brand had an unfavorable efficiency variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?

• A)The actual number of direct labor hours was lower than the budgeted hours.
• B)The actual variable overhead costs were higher than the budgeted costs.
• C)The actual variable overhead costs were lower than the budgeted costs.
• D)The actual number of direct labor hours was higher than the budgeted hours.