Reference no: EM132687922

Problem 1: Bailey Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Bailey Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance

a. will be unfavorable.

b. will be favorable.

c. will depend upon the capacity measure selected to assign overhead to production.

d. is impossible to determine without additional information.

Problem 2: A variable overhead spending variance is caused by

a. using more or fewer actual hours than the standard hours allowed for the production achieved.

b. paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base.

c. larger/smaller waste and shrinkage associated with the resources involved than expected.

d. both b and c are causes.