There is no efficiency variance for fixed overhead costs because a specific number of hours of fixed overhead costs will be unaffected by how efficiently machine-hours are used to produce output in a given budget period.

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Fixed overhead costs are those costs that do not vary with changes in output or production levels. Therefore, the specific amount of fixed overhead costs budgeted for a given period will remain the same regardless of the level of efficiency in the use of machine-hours to produce output. As a result, there will be no efficiency variance for fixed overhead costs.

There Is No Efficiency Variance for Fixed Overhead Costs Because