Quality Brand products uses standard costing to manage their direct costs and th
ID: 2343585 • Letter: Q
Question
Quality Brand products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated bases on direct labor hours. In the first quarter, Quality brand had an unfavorable price variance for thier variable overhead costs. Which of the follwoing scenarios would be a reasonable explanation for that variance?the actual costs were lower than budgeted
the actual costs were higher than budgeted
the actual number of direct labor hours was higher than budgeted
the actual number of direct labor hours was lower than budgeted
Explanation / Answer
Solution:
the actual number of direct labor hours was higher than budgeted