ECONOMICS

Detailed explanation-1: -False; The interpretations are different. The variable overhead efficiency variance focuses on the quantity of allocation-base used, while the efficiency variance for direct-cost items focuses on the quantity of materials and labor-hours used.

Detailed explanation-2: -What is the Variable Overhead Efficiency Variance? A favorable variance means that the actual hours worked were less than the budgeted hours, resulting in the application of the standard overhead rate across fewer hours, resulting in less expense being incurred.

Detailed explanation-3: -Which statement regarding variable overhead variance analysis is true? The variable overhead efficiency variance is exactly the same as the direct labor rate variance.

Detailed explanation-4: -Hence, when the direct labor efficiency variance is favorable (standard is higher than actual labor hours), the variable overhead efficiency variance will be favorable.

Detailed explanation-5: -What is the variable overhead efficiency variance? In accounting, the variable overhead efficiency variance is the difference between actual hours worked and budgeted hours worked and the effect of that difference on revenue and profit. It originates from the difference in productive efficiency.