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Question(s) / Instruction(s):

If variable overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then:

A.            actual variable overhead rate exceeded the standard rate.

B.            standard variable overhead rate exceeded the actual rate.

C.            actual direct labor-hours exceeded the standard direct labor-hours allowed for the actual output.

D.            standard direct labor-hours allowed for the actual output exceeded the actual hours.

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