The part of the variable overhead budget variance due to the difference between actual hours required and standard hours allowed for the work done is called the:
A) variable overhead spending variance.
B) variable overhead budget variance.
C) variable overhead efficiency variance.
D)variable overhead volume variance.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance calculates the difference between the actual hours worked and the standard hours allowed, and is used to measure the efficiency of the production process. The variable overhead spending variance, on the other hand, measures the difference between the actual and budgeted variable overhead costs, while the variable overhead volume variance measures the difference between actual and budgeted production volume. Therefore, the correct option is (C) variable overhead efficiency variance.

The Part of the Variable Overhead Budget Variance Due to the Difference