Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be A. The same amount as the direct labor efficiency variance. B. Zero. C. Unfavorable. D. Favorable.

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Business

Gideon Mccullough

29 August, 01:13

Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be A. The same amount as the direct labor efficiency variance. B. Zero. C. Unfavorable. D. Favorable.

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Conan · Answer 1

D. Favorable.

Explanation:

This has been explained in many different ways or forms but simply, it is described as the difference in amount to time that was used in production against the amount of time the said production was totally done or completed. And in this case where it is required for its application in standard direct labour, the efficiency variance is said to be totally unfavourable, therefore overhead efficiency variance will be favourable. In other words, it is explained also that inputs been used to produce output units are based on models or past experience.