When a variable overhead efficiency variance is identified, managers will want to talk with the production manager to evaluate the use of the activity base.

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Quizplus · Accepted Answer

This is true as the variable overhead efficiency variance indicates whether the actual hours worked were greater or less than the standard hours allowed for the actual production, which in turn can be influenced by the use of the activity base. Therefore, managers would want to discuss with the production manager to understand why there was an efficiency variance and how the activity base can be better used in future production.

When a Variable Overhead Efficiency Variance Is Identified, Managers Will