DEFINITION of 'Efficiency Variance'
The difference between the theoretical amount of inputs required to produce a unit of output and the actual amount of inputs used. In manufacturing, efficiency variance can be used to analyze the effectiveness with respect to labor, materials, machine time and other production factors.
INVESTOPEDIA EXPLAINS 'Efficiency Variance'
An important factor in measuring efficiency variance is the development of a set of realistic assumptions surrounding the theoretical amount of inputs that should be required. If the actual amount of inputs used exceeds the amount theoretically required, there is a negative efficiency variance. On the other hand, if actual inputs are less than the amounts theoretically required, then there would be a positive efficiency variance. Since the baseline theoretical inputs are often calculated for the optimal conditions, a slightly negative efficiency variance is normally expected.

Variance
The spread between numbers in a data set, measuring Variance ... 
Yield Variance
The difference between actual output and standard output of a ... 
Cost Of Labor
The sum of all wages paid to employees, as well as the cost of ... 
Labor Productivity
A measurement of economic growth of a country. Labor productivity ... 
Raw Materials
A material or substance used in the primary production or manufacturing ... 
Capacity Utilization Rate
A metric used to measure the rate at which potential output levels ...

Economics
Globalization: Progress Or Profiteering?

Fundamental Analysis
Vital Link: Manufacturing And Economic ...

Economics
What Are Economies Of Scale?

Investing
Doing More With Less: The SalesPerEmployee ...