Labour Efficiency Variance=680 F
Labour Rate Variance=2040 F
Machine Efficiency Variance=2720 A
Machine Rate Variance= NIL
Fixed overhead expenditure var = 1700 (F)
Fixed overhead volume var = 1700 (A)
a) Explain the circumstances in each of the variance in hours and in costs. From the variances above, provide possible causes.
b) Explain the benefits of using multiple activity bases for variable cost absorption.