Final answer:
It is true that more analysis is needed to determine the cause of variance if labor and material costs are not separated since these variable costs are directly linked to output changes.
Step-by-step explanation:
It is true that if the cost of labor and materials has not been separated, then additional analysis is required to determine the cause of the calculated variance. Variable costs, such as labor and raw materials, are intrinsically linked to output levels. An increase or decrease in output necessitates a corresponding adjustment in variable inputs. If labor costs are intertwined with the costs of materials, isolating the contribution of each to overall cost variance can be complex and demands further analysis.