For example, if the actual factory overhead costs are $3.50 per unit and the standard factory overhead costs are $3.80 per unit, you have a favorable factory overhead cost variance of 30 cents.

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 ...

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%.

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 ...