Question

The part of the variable overhead budget variance due to the difference between actual variable overhead cost and the standard cost allowed for the actual inputs used is called the:

1) variable overhead spending variance
2) variable overhead budget variance
3) variable overhead efficiency variance
4) variable overhead volume variance

Answer 1

The variable overhead efficiency variance is the part of the variable overhead budget variance that represents the difference between actual variable overhead cost and the standard cost allowed for the actual inputs used.

Step-by-step explanation:

The part of the variable overhead budget variance due to the difference between actual variable overhead cost and the standard cost allowed for the actual inputs used is called the variable overhead efficiency variance. This variance measures the difference between the actual variable overhead cost and the standard variable overhead cost based on the actual inputs used. It shows how efficiently the variable overhead was used relative to the standard.