The variable overhead efficiency variance is:
A) $430 U.
B) $740 F.
C) $950 U.
D) $1,120 F.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance measures the difference between the actual hours worked and the expected hours required to produce the actual level of output, multiplied by the variable overhead rate. The formula for the variance is (AH - SH) x SR, where AH represents the actual hours worked, SH represents the standard hours that should have been worked, and SR represents the variable overhead rate. 
In this case, the variance is calculated as (680 - 600) x $2 = $1,120 F. Thus, the best choice is D.

The Variable Overhead Efficiency Variance Is