Variable manufacturing overhead variance analysis - the basic formula

Variable manufacturing overhead variance analysis - the basic  formula

(Actual Costs Incurred)

I. Actual Input Qty. × Actual Rate

II. Actual Input Qty. × Budgeted Rate

----->  I - II =  Spending variance

(Flexible Budget)

III. Budgeted Input Qty. Allowed for Actual Output × Budgeted Rate

------> II - III = Efficiency variance

IV (Allocated)

Budgeted Input Qty. Allowed for Actual Output × Budgeted Rate

-------> III - IV = Never a variance