The variable overhead efficiency variance is computed the same way as the efficiency variance for direct cost items,nevertheless,the interpretation of the variance is very different.

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Quizplus · Accepted Answer

The statement is true. While the calculation method may be similar to that of direct cost items, the variable overhead efficiency variance measures the difference between the actual and budgeted hours of variable overhead incurred in production, with the assumption that the budgeted variable overhead rate is appropriate. It is used to assess the efficiency of variable overhead usage in production, rather than the efficiency of direct labor or material usage.

The Variable Overhead Efficiency Variance Is Computed the Same Way