Variable overhead efficiency variance
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Variable overhead efficiency variance is the difference between the actual quantity of variable overhead cost-allocation base used and budgeted quantity of variable overhead cost-allocation base that should have been used to produce actual output, multiplied by budgeted variable overhead cost per unit of cost allocation base.
Definitions
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Variable overhead efficiency variance. The difference between the actual quantity of variable overhead cost-allocation base used and budgeted quantity of variable overhead cost-allocation base that should have been used to produce actual output, multiplied by budgeted variable overhead cost per unit of cost allocation base.v
