Direct labour hour is often assumed as the sole cost driver in analyzing the total variable overhead cost variance into spending and efficiency variances.
Required:
a)Will direct labour cost ever be a better cost driver of variable overhead costs than direct labour hour? Explain
b)How is the standard variable overhead rate different from the standard labour rate in variance analysis? Explain.

Question

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The Answer of Direct labour hour is often assumed as the sole cost driver in analyzing the total variable overhead cost variance into spending and efficiency variances.
Required:
a)Will direct labour cost ever be a better cost driver of variable overhead costs than direct labour hour? Explain
b)How is the standard variable overhead rate different from the standard labour rate in variance analysis? Explain.

Direct Labour Hour Is Often Assumed as the Sole Cost