uantity variances for direct cost categories (direct materials and direct labor) are based on differences between the actual inputs used and the standard inputs allowed for the actual output achieved. A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is: The efficiency variance for variable overhead is based on the cost effectiveness in using the cost- allocation base. There is no key difference between the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead; they should be evaluated in exactly the same manner. The flexible-budget variance for variable overhead is always equal to the spending variance for variable overhead. The flexible-budget variance for variable overhead is always equal to the efficiency variance for variable overhead. An efficiency variance for variable overhead cannot be calculated