Question: When analyzing the total variable overhead cost variance into both spending and efficiency variances, it is often assumed that direct labour hours is the sole

When analyzing the total variable overhead cost variance into both spending and efficiency variances, it is often assumed that direct labour hours is the sole cost driver.

Required:

Explain

1) if direct labour costs could ever be a better cost driver of variable overhead costs than direct labour hours.

2) How is the standard variable overhead rate different from the standard labour rate in variance analysis? Explain.

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