The variable overhead efficiency variance measures:
A) The overall effectiveness of the production supervisor's performance
B) The degree to which variable overhead has varied over a period of time
C) The degree of efficiency in using variable overhead items such as indirect materials
D) The amount of variable overhead that should have been saved or incurred due to the efficient or inefficient use of the activity base

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is a measure of the efficiency with which the overhead activity base was used during the period. If more of the activity base was used than was allowed by the standards, the variance is unfavorable. Conversely, if less of the activity base was used than was allowed by the standards, the variance is unfavorable

The Variable Overhead Efficiency Variance Measures