How Is the Variable Overhead Efficiency Variance Calculated

question 27

Multiple Choice

How is the variable overhead efficiency variance calculated?

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

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Definitions:

Service Factor

A measure of service level performance, often used in inventory control to determine the appropriate amount of safety stock to meet a specified service level.

Product Availability

A measure of the extent to which goods or services are ready for sale and can be purchased by consumers.

Online Sales

The process of selling goods and services through the internet, enabling transactions to be completed digitally.

Brick and Mortar

A business or retail outlet that has at least one physical location, as opposed to being online or virtual.