Trull Company uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In the first quarter, Trull had a favorable cost variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance? www OA. The actual number of direct labor hours was lower than the budgeted hours. OB. The actual variable overhead costs were higher than the budgeted costs. OC. The actual variable overhead costs were lower than the budgeted costs. OD. The actual number of direct labor hours was higher than the budgeted hours.

Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 14CE: Refer to Cornerstone Exercise 8.13. In March, Nashler Company produced 163,200 units and had the...
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Trull Company uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In
the first quarter, Trull had a favorable cost variance for variable overhead costs. Which of the following scenarios is
a reasonable explanation for this variance?
A. The actual number of direct labor hours was lower than the budgeted hours.
B. The actual variable overhead costs were higher than the budgeted costs.
OC. The actual variable overhead costs were lower than the budgeted costs.
OD. The actual number of direct labor hours was higher than the budgeted hours.
Transcribed Image Text:Trull Company uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In the first quarter, Trull had a favorable cost variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance? A. The actual number of direct labor hours was lower than the budgeted hours. B. The actual variable overhead costs were higher than the budgeted costs. OC. The actual variable overhead costs were lower than the budgeted costs. OD. The actual number of direct labor hours was higher than the budgeted hours.
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