Which of the following statements is true?1. The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used.2. The variable overhead efficiency variance measures the difference between the actual level of activity and the standard activity allowed for the actual output, multiplied by the variable part of the predeterminedoverhead rate.3. If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor rate variance and unfavorable variable overhead rate variance for the same period.

2. If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to…

Answered: Which of the following statements is…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 20MC: The variable overhead efficiency variance is caused by the difference between which of the...

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Similar questions

The variable overhead rate variance is caused by the sum between which of the following? A. actual and standard allocation base B. actual and standard overhead rates C. actual and budgeted units D. actual units and actual overhead rates
What are some possible reasons for a labor rate variance? A. hiring of less qualified workers B. an excess of material usage C. material price increase D. utilities usage change
When is the direct labor time variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price
Which of the following is a possible cause of an unfavorable labor rate variance? A. hiring too many workers B. hiring higher-quality workers at a higher wage C. making too many units D. purchasing too much material
When is the direct labor time variance unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price
Identify several causes of an unfavorable labor efficiency variance.
When is the labor rate variance unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price
What are some reasons for a material quantity variance? A. building rental charges increase B. labor rate decreases C. more qualified workers D. labor efficiency increases
Which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring substandard workers B. making too many Units C. buying higher-quality material D. paying too much for workers
When is the labor rate variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price
The overhead variance is overapplied if a. actual overhead is less than applied overhead. b. actual overhead is more than applied overhead. c. applied overhead is less than actual overhead. d. estimated overhead is less than applied overhead. e. estimated overhead is more than applied overhead.
Acme Inc. has the following information available: A. Compute the material price and quantity, and the labor rate and efficiency variances. B. Describe the possible causes for this combination of favorable and unfavorable variances.

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