Section A

AgriTech uses automated harvesters. They calculate a variable overhead efficiency variance at the end of the harvest season.

What does the variable overhead efficiency variance measure?

The difference between actual variable overheads incurred and budgeted variable overheads.

The difference between the standard hours allowed for actual production and the actual hours worked, valued at the standard variable overhead rate.

The difference between the actual variable overhead rate and the standard variable overhead rate, multiplied by actual hours.

The over or under-absorption of fixed overheads due to changes in production volume.