Variable overhead is applied in the basis of standard direct labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be?
a Favorable
b unfavorable
c zero
d indeterminable
Variable overhead is applied in the basis of standard direct labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be?
a Favorable
b unfavorable
c zero
d indeterminable
The Variabel overhead efficiency is directly relatable to Direct Labour Hours
Therefore a direct relationship exists between
Direct Labour Hours &
Variable Overhead Hours.
Varibale overhead effciency variance is directly relatable to Direct Labour hours, if there is no IDLE TIME HOURS.
The answer to your question is ( b )
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