If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will not be the same amount as the labor efficiency variance. The direct labor efficiency variance is (Actual Hours ? Standard Hours for Actual Output) × Standard Labor Rate. The variable overhead efficiency variance is (Actual Activity Level of VOH allocation base used for Actual Output ? Standard Activity Level of VOH allocation base allowed for Actual Output) × Standard Application Rate. Since direct labor hours is the allocation base, the "actual" and "standard" will be the same in both formulas. The difference between the direct labor efficiency variance and the variable overhead efficiency variance will be the hourly rate that the difference between "actual" and "standard" is multiplied by.
The direct labor efficiency variance is (Actual Hours ? Standard Hours for Actual Output) × Standard Labor Rate. The variable overhead efficiency variance is (Actual Activity Level of VOH allocation base used for Actual Output ? Standard Activity Level of VOH allocation base allowed for Actual Output) × Standard Application Rate. Since direct labor hours is the allocation base, the "actual" and "standard" will be the same in both formulas. The only difference between the direct labor efficiency variance and the variable overhead efficiency variance will be the hourly rate that the difference between "actual" and "standard" is multiplied by. Therefore, if the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will also be unfavorable. (And if the direct labor efficiency variance is favorable, the variable overhead efficiency variance will also be favorable.)
If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will not be favorable. The direct labor efficiency variance is (Actual Hours ? Standard Hours for Actual Output) × Standard Labor Rate. The variable overhead efficiency variance is (Actual Activity Level of VOH allocation base used for Actual Output ? Standard Activity Level of VOH allocation base allowed for Actual Output) × Standard Application Rate. Since direct labor hours is the allocation base, the "actual" and "standard" will be the same in both formulas. The only difference between the direct labor efficiency variance and the variable overhead efficiency variance will be the hourly rate that the difference between "actual" and "standard" is multiplied by.
If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will not be zero. The direct labor efficiency variance is (Actual Hours ? Standard Hours for Actual Output) × Standard Labor Rate. The variable overhead efficiency variance is (Actual Activity Level of VOH allocation base used for Actual Output ? Standard Activity Level of VOH allocation base allowed for Actual Output) × Standard Application Rate. Since direct labor hours is the allocation base, the "actual" and "standard" will be the same in both formulas. The only difference between the direct labor efficiency variance and the variable overhead efficiency variance will be the hourly rate that the difference between "actual" and "standard" is multiplied by.
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