The variable overhead spending variance captures
A)whether the company has paid more or less for variable overhead items.
B)the relative efficiency with which variable overhead items are used.
C)whether a company is more or less efficient with respect to the production activity,since variable overhead varies with production activity.
D)both whether the company has paid more or less for variable overhead items and the relative efficiency with which variable overhead items are used.

Question

Quizplus · Accepted Answer

The variable overhead spending variance captures both whether the company has paid more or less for variable overhead items and the relative efficiency with which variable overhead items are used. It represents the difference between actual variable overhead spending and the budgeted amount of variable overhead spending based on the actual level of production. Thus, it reflects both cost and efficiency factors.

The Variable Overhead Spending Variance Captures