Question

The variable overhead efficiency variance is computed and interpreted the direct-cost efficiency variance.

a) the same as; the same as
b) the same as; differently than
c) differently than; the same as
d) differently than; differently than

Answer 1

The variable overhead efficiency variance is computed and interpreted differently than the direct-cost efficiency variance.

Step-by-step explanation:

The correct option is d) differently than; differently than.

The variable overhead efficiency variance is computed by comparing the actual hours of direct labor used to the standard hours allowed for the actual output.

The direct-cost efficiency variance, on the other hand, is computed by comparing the actual quantity of direct materials used to the standard quantity allowed for the actual output.

Therefore, the variable overhead efficiency variance is computed and interpreted differently than the direct-cost efficiency variance.