A variable overhead spending variance is caused by
A)using more or fewer actual hours than the standard hours allowed for the production achieved.
B)paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base.
C)larger/smaller waste and shrinkage associated with the resources involved than expected.
D)both b and c are causes.

Question

Quizplus · Accepted Answer

A variable overhead spending variance is caused by paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base (choice B) and/or larger/smaller waste and shrinkage associated with the resources involved than expected (choice C). Using more or fewer actual hours than the standard hours allowed for the production achieved (choice A) would result in a variable overhead efficiency variance.

A Variable Overhead Spending Variance Is Caused by