The variable overhead efficiency variance is the difference between the actual variable overhead costs incurred and the variable overhead costs that would have been incurred if the actual level of output had been achieved as planned. This variance can be expressed in terms of both cost and efficiency.

The variable overhead efficiency variance is calculated as:

Variable overhead efficiency variance = (Actual variable overhead costs - Planned variable overhead costs) x (Actual output / Planned output)

The variable overhead efficiency variance is a measure of how efficiently the company is using its variable overhead resources. A favorable (or negative) variance indicates that the company is incurring less (or more) variable overhead costs than planned.

There are a number of factors that can contribute to a favorable or unfavorable variable overhead efficiency variance. For example, if the company is using more efficient production methods than planned, this could lead to a favorable variance. Alternatively, if the company is using less efficient production methods than planned, this could lead to an unfavorable variance.

The variable overhead efficiency variance is an important tool for managers as it can help to identify areas where the company is incurring unnecessary costs. By understanding the causes of the variance, managers can take steps to improve efficiency and reduce costs. What does the efficiency variance mean? The efficiency variance is a measure of how much a process varies in terms of its efficiency. Efficiency is a measure of how well a process converts inputs into outputs. The higher the efficiency, the less waste there is in the process. The efficiency variance is calculated by taking the variance of the efficiency values for a process and dividing it by the mean efficiency. This gives a measure of how much the process varies in terms of its efficiency. How do you calculate the efficiency variance of a variable overhead? There are a few steps in calculating the efficiency variance of a variable overhead:

1. Calculate the actual variable overhead for the period.
2. Calculate the budgeted variable overhead for the period.
3. Calculate the variable overhead efficiency variance by subtracting the budgeted variable overhead from the actual variable overhead.

What is variable overhead give two example?

Variable overhead is a type of indirect cost that fluctuates in direct proportion to changes in the level of activity or output. For example, variable overhead costs might include the cost of raw materials, fuel, and other variable inputs used in production. The two examples given below will help to illustrate how variable overhead can affect a company's bottom line.

1. A company's variable overhead costs increase as production levels increase. This means that the company's marginal cost of production will also increase, which will ultimately lead to higher prices for their products.

2. A company's variable overhead costs decrease as production levels decrease. This means that the company's marginal cost of production will also decrease, which will ultimately lead to lower prices for their products. What causes overhead variance? There are a few different causes of overhead variance. One common cause is differences in the amount of activity between periods. For example, if one period has more production than another, there will be more overhead costs incurred in that period. Another common cause is changes in the prices of the inputs used in production. If the price of raw materials goes up, the overhead costs will also increase. Finally, changes in the efficiency of the production process can also lead to overhead variance. If the production process becomes more efficient, the overhead costs will go down.

What are the three types of overhead variances and what are the formulas?

There are three types of overhead variances:

1. The variable overhead efficiency variance measures the difference between the actual amount of variable overhead incurred and the amount that would have been incurred if the actual level of output had been achieved at the standard variable overhead rate. The formula for the variable overhead efficiency variance is:

Variable overhead efficiency variance = (Actual output - Standard output) x Standard variable overhead rate

2. The variable overhead spending variance measures the difference between the actual amount of variable overhead incurred and the amount that would have been incurred at the budgeted variable overhead rate. The formula for the variable overhead spending variance is: