Question

Which of the following is the correct mathematical expression is used to calculate *variable overhead efficiency variance*?

A) (Actual rate − Budgeted rate) × Budgeted quantity
B) (Actual quantity × Budgeted rate) - (Budgeted input quantity allowed for actual output × Budgeted rate)
C) (Actual quantity ÷ Budgeted rate) − (Budgeted quantity ÷ Budgeted rate)
D) (Actual quantity ÷ Budgeted rate) × Budgeted quantity allowed for actual output

Answer 1

The correct expression for calculating variable overhead efficiency variance is Expression B, which takes into account the actual quantity of variable overheads used and compares it to the standard quantity allowed for the actual production.

Step-by-step explanation:

The correct mathematical expression used to calculate variable overhead efficiency variance is:

B) (Actual quantity × Budgeted rate) - (Budgeted input quantity allowed for actual output × Budgeted rate)

Variable overhead efficiency variance is part of managerial accounting and cost accounting that measures the efficiency with which variable overhead resources are used in production. It is calculated by comparing the actual quantity of variable overheads consumed to what should have been used for the actual output. Understanding this concept is important for firms to manage their overall variable costs and maintain profitability.

It seems like you might be referring to a multiple-choice question or set of options related to the mathematical expression for calculating variable overhead efficiency variance. However, the options are not provided in your current message. If you could provide the options or specify the expressions you are considering, I would be happy to help you determine the correct mathematical expression for calculating variable overhead efficiency variance.