In a standard cost system,variable overhead is applied
A)using actual direct labor hours.
B)using budgeted indirect labor hours.
C)using direct labor hours at practical capacity.
D)using standard direct labor hours.
E)all of these.

Question

Quizplus · Accepted Answer

Variable overhead is applied using standard direct labor hours, as it is assumed that the amount of variable overhead incurred is directly related to the amount of direct labor hours worked. Actual or budgeted indirect labor hours, or practical capacity, are not typically used in the application of variable overhead.

In a Standard Cost System,variable Overhead Is Applied