111. CSO: 1B1e LOS: 1B1s
Highlight Inc. uses a standard cost system and applies factory overhead to products on
the basis of direct labor hours. If the firm recently reported a favorable direct labor
efficiency variance, then the
a. variable overhead spending variance must be favorable.
b. variable overhead efficiency variance must be favorable.
c. fixed overhead volume variance must be unfavorable.
d. direct labor rate variance must be unfavorable.
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