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Akao Products uses a standard cost system. Overhead costs are allocated based on direct labor hours. In the first quarter, Akao had an unfavorable efficiency variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance?
A) The actual variable overhead costs were higher than the budgeted costs.
B) The actual variable overhead costs were lower than the budgeted costs.
C) The actual number of direct labor hours was higher than the budgeted hours.
D) The actual number of direct labor hours was lower than the budgeted hours.
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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Deprecated Author
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#2
7 years ago
Makes perfect sense, thx
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