What is the correct formula for the variable overhead efficiency variance?
A) (The labour or machine hours that should have been used in actual production - the actual labour or machine hours used in actual production) x the actual cost for one hour of variable overhead.
B) Actual expenditure on variable overheads used in actual production - expected expenditure on variable overheads used in actual production.
C) What the variable overheads incurred in actual production should have cost - what the variable overheads incurred in actual production actually cost.
D) (Expected direct labour or machine hours for actual production - actual direct labour or machine hours for actual production) x the standard cost for one hour of variable overhead.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated by taking the difference between the expected and actual direct labor or machine hours for actual production and multiplying it by the standard cost for one hour of variable overhead.

What Is the Correct Formula for the Variable Overhead Efficiency