1 OHV Corporation makes a single product. Manufacturing overhead is allocated on the basis of direct labour-hours. Actual fixed overhead cost equalled the budgeted fixed overhead cost. The fixed overhead volume (denominator) variance was unfavourable. Which of the following statements is correct? A Too many direct labour-hours were used for the output achieved. B Direct labour was efficiently used in the production of output. C The actual quantity of product was less than the amount of budgeted production. D Actual overhead costs were over budget. 2 Which of the following is not a problem associated with the use of standard costs? A Standard cost reports are not prepared and distributed on a timely basis. B Sometimes a "favourable" variance can be as bad or worse than an "unfavourable" variance. C Using standard costs complicates the bookkeeping. D Meeting the standards may not actually be sufficient in a competitive environment