An unfavourable variable overhead rate variance indicates that
A) variable overhead items were used efficiently.
B) the price of variable overhead items was more than budgeted.
C) the variable overhead cost-allocation base was not used efficiently.
D) the denominator level was not accurately determined.
E) the denominator level was used more than planned.

Question

Quizplus · Accepted Answer

An unfavourable variable overhead rate variance means that the actual rate paid for variable overhead items was more than the budgeted/standard rate. This could happen due to price increases or inefficient purchasing practices.

An Unfavourable Variable Overhead Rate Variance Indicates That