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If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then: Garrison 16e Rechecks 2017-08-17 Multiple Choice

the actual variable overhead rate exceeded the standard rate.
the standard variable overhead rate exceeded the actual rate.
the standard direct labor-hours allowed for the actual output exceeded the actual hours.
None of the above

Answer :

Answer:

Variable overhead rate variance=Actual overhead costs-(actual hours*Standard rate)

Given the variable overhead rate variance is favourable that means the actual overhead rate is less than the standard overhead rate.

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