The difference between the standard variable overhead cost for the actual quantity of the cost driver used for applying variable overhead and the standard variable overhead cost allowed for the units manufactured during a given period is the:
A) Total variable overhead variance.
B) Variable overhead spending variance.
C) Variable overhead rate variance.
D) Variable overhead efficiency variance.
E) Variable overhead flexible-budget variance.

Question

Quizplus · Accepted Answer

The variable overhead efficiency variance measures the difference between the standard variable overhead cost for the actual quantity of the cost driver used and the standard variable overhead cost allowed for the units manufactured. This variance focuses on the efficiency of using the cost driver, not on the rate or spending differences.

The Difference Between the Standard Variable Overhead Cost for the Actual