ethe following Variance Table to answer the next four questions. Variable Overhead Spend. Var. Variable Overhead Effic. Var. $1,800 Fav. $2,500 Fav. $2,000 Unf. Price Var. Quantity Var. $6,000 Fav. terials bor Rate Variance $1,500 Unf. Fixed Overhead Budget Var. $1,000 Unf. Efficiency Var. $4,000 Fav. Fixed Overhead Volume Var. $5,000 Fav. aterials abor 5. If the purchasing manager bought lower quality materials than specified in the compan explain both the Materials Price Variance and the Materials Quantity Variance. True B) False 16) The company may have used direct labor hours as its cost driver for overhead. True False There were more actual direct labor hours used in the factory than the standard number allowable for the actual production. A. True 17) False Assume that the above company uses 11,000 hours as its denominator level. If th 10,000 hours at the denominator level, the standard rate for variabl A. Smaller B,Larger 18) e overh The same An unfavorable activity variance for a cost indicates that spending was higher than it sho for the actual level of activity for the period. 19) True )) False A flexible budget is an estimate of what revenues and costs should have been, given the hat had been planned for the period. 20) A)) True False 21) When establishing budgets for a company, the starting point is: The cash budget The production budget The direct materials budget The sales bydget A) C) D)