Overhead efficiency variance is a change that results from variations in overhead costs. When discussing variations in labor costs, businesses use the term "direct labor efficiency variance." ...

As a result, the fixed overhead volume variance is an unhealthy $60,000. The percentage of actual production compared to the expected production, or the efficiency, is only 25%.

Accountants perform standard costing by comparing expected costs with actual costs and analyzing the differences. Accountants usually examine direct labor costs, direct product costs and overhead ...

Variable overhead spending variance is favorable if the actual costs of indirect materials — for example, paint and consumables such as oil and grease—are lower than the standard or budgeted ...

Eliminate labor variance reporting. Direct labor accounts for less than 20% of the cost of most manufactured products but more than 80% of all variance reporting. If the company isn’t using its labor ...