A. The fixed overhead volume variance is the difference between the budgeted amount of fixed overhead and the amount of fixed overhead applied (standard rate × standard input for the actual level of output). There is no connection between this difference and the direct labor usage (efficiency) variance.

B. The variable overhead spending variance is the difference between the actual amount of variable overhead incurred and the standard amount of variable overhead allowed for the actual quantity of the VOH allocation base used for the actual output produced. There is no connection between this difference and the direct labor usage (efficiency) variance.

C. The variable overhead spending variance is the difference between the actual amount of variable overhead incurred and the standard amount of variable overhead allowed for the actual quantity of the VOH allocation base used for the actual output produced. There is no connection between this difference and the direct labor usage (efficiency) variance.

D. An unfavorable direct labor efficiency variance means that more time was spent in production than budgeted. A number of reasons could cause this: poor performance of production employees, poor product design, waste, theft, poor material quality, etc.

An unfavorable material usage variance means that more material was spent to produce units of finished product. Poor material quality could cause an unfavorable material usage variance. The poor quality material could also require more time to be spent by production workers to perform their tasks. That is why an unfavorable direct labor efficiency variance could be caused by unfavorable material usage variance.