Bellow Ltd.uses direct labour hours as the cost driver for variable overhead.In order to calculate the variable overhead efficiency variance,which of the following items does not need to be known?
A) Actual overhead costs
B) Actual direct labour hours
C) Standard variable overhead rate per direct labour hour
D) Standard direct labour hours allowed

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance is calculated by comparing the actual hours worked with the standard hours allowed for the production output achieved, and then multiplying the difference by the standard variable overhead rate per direct labour hour. The actual overhead costs are not needed to calculate this variance.