1. Under the two-variance method for analyzing factory overhead, the difference between the actual factory overhead and the factory overhead applied to productions is the a. controllable variance c. Efficiency variance b. Net overhead variance d. Volume variance 2. Under the three-variance method for analyzing factory overhead, whi.ch of the following is used in the computation of the spending variance? a. efficiency variance c. volume variance b. spending variance d. idle capacity variance 3. Variable factory overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable factory overhead efficiency variance will be a. favorable c. Zero b. unfavorable d. the same amount as the labor efficiency variance 4. The planned activity level for the assembly department of the Shields Company during the month of December was 10,000 direct labor hours. The actual number of direct labor hours worked during December was 9,000. Overhead is allocated on the basis of actual direct labor hours. What kind of variance occurred? a. an unfavorable labor rate variance c. an unfavorable labor efficiency variance b. a favorable overhead volume variance d. an unfavorable overhead volume variance 5. In a standard cost system, an unfavorable overhead volume variance would result if a. there is an unfavorable labor efficiency variance b. there is a favorable labor rate variance c. production is less than planned d. all of the above