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Quantity variances for direct cost categories (direct materials and direct labor) are based on differences between the actual inputs used and the

Quantity variances for direct cost categories (direct materials and direct labor) are based on differences between the actual inputs used and the standard inputs allowed for the actual output achieved. A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is:
a. An efficiency variance for variable overhead cannot be calculated.

b. The flexible-budget variance for variable overhead is always equal to the efficiency variance for variable overhead.

c. The efficiency variance for variable overhead is based on the efficiency with which the cost-allocation base is used.

d. The flexible-budget variance for variable overhead is always equal to the spending variance for variable overhead.

e. There is no key difference between the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead; they should be evaluated in exactly the same manner.
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Accounting.xls

Solution
Option E
There is no key difference they both measure how efficiently actual input/labour is used Material:SP * SQ A
c) Material usage variance =
Labour :SR*ST
A
c) Labour Efficiency...

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