If the actual amount of the cost allocation base is $56,000 and the budgeted amount is $17,000, what is the variable overhead efficiency variance?

Multiple choice question for Flexible Budget Overhead Cost Variance. Select an option, then review the explanation below.

Explanation

The variable overhead efficiency variance is calculated by subtracting the budgeted quantity from the actual quantity of the cost allocation base. Here, $56,000 - $17,000 equals $39,000, which corresponds to option A.

Practice related questions from the same subject.

1.What could be the reason for a budget overrun if the machine time standards are set unrealistically low?
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If the actual amount of the cost allocation base is $56,000 and the budgeted amount is $17,000, what is the variable overhead efficiency variance?

Explanation

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