How Is the Variable Manufacturing Overhead Efficiency Variance Calculated

question 215

Multiple Choice

How is the variable manufacturing overhead efficiency variance calculated?

• A)The difference between the actual overhead rate and the standard overhead rate multiplied by the standard overhead rate
• B)The difference between the standard hours allowed and the actual hours used multiplied by the standard overhead rate
• C)The difference between the standard hours allowed and the actual hours used
• D)The difference between the standard hours allowed and the actual hours used multiplied by the actual overhead rate

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Definitions:

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Profitability

A measure of the efficiency and success of a business in generating profits from its operations over a period of time.

Horizontal Analysis

A financial analysis technique that examines the changes in the amounts of specific financial statement items over a period of time.

Base Year Figure

A reference point in time used for comparison in financial and economic analysis to track changes and trends.