Author Question: The variable overhead spending variance (Read 78 times)

yagurl · **on:** Feb 5, 2023

Question 1

The variable overhead spending variance is calculated as
◦ Standard cost - (actual quantity × actual price).
◦ Actual cost - (standard quantity × standard price).
◦ Actual cost - (actual quantity × standard price).
◦ Actual results minus the variable overhead flexible budget amount.

Question 2

The variable overhead spending variance
◦ is unfavorable when more variable overhead items are used than allowed at the level of activity achieved.
◦ captures whether the company has paid more or less for variable overhead items.
◦ is the difference between the actual cost of variable overhead items and the amount of variable overhead cost that is expected to be incurred at the actual level of activity base experienced.
◦ relates to the efficient use of the activity base rather than the efficient use of the variable overhead item.

char00char · **Reply #1 on:** Feb 5, 2023

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