Which of the following statements is true?

The variable overhead efficiency variance measures the difference between the actual level of

activity and the standard activity allowed for the actual output, multiplied by the fixed part of the

predetermined overhead rate.

If demand is insufficient to keep everyone busy and workers are not laid off, an unfavorable $($U$)$

variable overhead efficiency variance often will be a result unless managers build excessive

inventories.

Neither statement is true.

Only statement$1$ is true.

Only statement $2$ is true.

Both statements are true.