The efficiency variance for variable overhead cost is based on the efficiency with which the cost-allocation base is used.

Question

Quizplus · Accepted Answer

The efficiency variance for variable overhead cost measures the difference between the actual amount of the cost-allocation base used and the standard amount of the cost-allocation base that should have been used to achieve the actual level of output. Therefore, it is based on the efficiency with which the cost-allocation base is used.

The Efficiency Variance for Variable Overhead Cost Is Based on the Efficiency