The difference between budgeted variable overhead for actual hours and standard overhead is the variable overhead spending variance.

Question

Quizplus · Accepted Answer

The statement is incorrect. The difference between budgeted variable overhead for actual hours and standard overhead is called the variable overhead efficiency variance. The variable overhead spending variance is the difference between the actual variable overhead costs incurred and the budgeted variable overhead costs based on the standard rate per unit of the allocation base.

The Difference Between Budgeted Variable Overhead for Actual Hours and Standard