If Variable Overhead Is Applied on the Basis of Direct

question 48

Multiple Choice

If variable overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then:

• A) actual variable overhead rate exceeded the standard rate.
• B) standard variable overhead rate exceeded the actual rate.
• C) actual direct labor-hours exceeded the standard direct labor-hours allowed for the actual output.
• D) standard direct labor-hours allowed for the actual output exceeded the actual hours.

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