Just Bags Produces Leather Purses -Refer to the Figure

Multiple Choice

Just Bags produces leather purses. Just Bags has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows:
$\begin{array}{lrr}&\text { Static budget } & \text { Actual costs } \\&(20,000 \text { hours }) & (22,000 \text { hours }) \\\text { Direct materials } & \$ 80,000 & \$ 87,000 \\\text { Direct labour } & 160,000 & 174,000 \\\text { Rent } & 48,000 & 50,000 \\\text { Total } & \$ 288,000 & \$ 311,000\end{array}$
-Refer to the Figure.Which of the following can be concluded when comparing the static budget to the actual outcomes?

A) The manager had less direct labour hours.
B) The variances are all unfavourable.
C) The comparison is useful for assessing managerial efficiency.
D) A static budget should be used for assessing efficiency.