How is the variable manufacturing overhead efficiency variance calculated?
A)The difference between the actual overhead rate and the standard overhead rate multiplied by the standard overhead rate
B)The difference between the standard hours allowed and the actual hours used multiplied by the standard overhead rate
C)The difference between the standard hours allowed and the actual hours used
D)The difference between the standard hours allowed and the actual hours used multiplied by the actual overhead rate

Question

Quizplus · Accepted Answer

The variable manufacturing overhead efficiency variance is calculated as the difference between the standard hours allowed for the actual output produced and the actual hours used, multiplied by the standard overhead rate. This variance measures the efficiency of the workforce in using the time allowed and the impact of this on manufacturing overhead costs.

How Is the Variable Manufacturing Overhead Efficiency Variance Calculated