In a Company's Standard Costing System Direct Labor-Hours Are Used

question 135

Multiple Choice

In a company's standard costing system direct labor-hours are used as the base for applying variable manufacturing overhead costs. The standard direct labor rate is twice the variable overhead rate. Last period the labor efficiency variance was unfavorable. From this information one can conclude that last period the variable overhead efficiency variance was:

• A)unfavorable and half the labor efficiency variance.
• B)favorable and half the labor efficiency variance.
• C)unfavorable and twice the labor efficiency variance.
• D)favorable and twice the labor efficiency variance.

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Political Tactic

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