A variable overhead efficiency variance can be caused by using more than the allowed quantity of the various components of variable overhead.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is caused only by the efficient or inefficient use of the activity base that is used to apply variable overhead to the product or service. Using excessive amounts of the components of variable overhead will be reflected in the variable overhead spending variance, not the variable overhead efficiency variance.

A Variable Overhead Efficiency Variance Can Be Caused by Using