A favourable overhead efficiency variance is the result of
A) actual outputs exceeding actual inputs within the framework of a flexible budget.
B) standard outputs allowed for actual inputs exceeding the flexible budget inputs.
C) the flexible budget for actual input exceeding the actual costs incurred.
D) standard inputs allowed for actual outputs achieved exceeding the actual inputs within the framework of a flexible budget.

Question

Quizplus · Accepted Answer

A favourable overhead efficiency variance means that actual inputs (such as labor hours or machine hours) used to produce actual outputs exceeded the standard inputs allowed for the actual outputs achieved, all within the framework of the flexible budget. This means that the business was efficient in using its resources to achieve the desired level of output, resulting in lower overhead costs. Choice D describes this scenario.

A Favourable Overhead Efficiency Variance Is the Result of