Which of the following is the correct mathematical expression is used to calculate variable overhead efficiency variance?
A) (Actual rate ? Budgeted rate) × Budgeted quantity
B) (Actual quantity × Budgeted rate) - (Budgeted input quantity allowed for actual output × Budgeted rate)
C) (Actual quantity ÷ Budgeted rate) ? (Budgeted quantity ÷ Budgeted rate)
D) (Actual quantity ÷ Budgeted rate) × Budgeted quantity allowed for actual output

Question

Quizplus · Accepted Answer

The correct mathematical expression used to calculate variable overhead efficiency variance is (Actual quantity × Budgeted rate) - (Budgeted input quantity allowed for actual output × Budgeted rate). This formula calculates the difference between the actual input quantity used to produce a certain output and the budgeted input quantity allowed for that output, multiplied by the budgeted rate. The resulting variance shows whether the actual input quantity was used more or less efficiently than planned, leading to either favorable or unfavorable variance.

Which of the Following Is the Correct Mathematical Expression Is