Peterson Inc. uses direct labor hours as the cost driver for variable overhead. Which of the following items does not need to be known, in order to calculate the variable overhead spending variance?
A) Actual overhead costs
B) Actual direct labor hours
C) Standard variable overhead rate per direct labor hour
D) Standard direct labor hours allowed

Question

Quizplus · Accepted Answer

The variable overhead spending variance focuses on the difference between the actual overhead costs incurred and the expected (or standard) costs based on the actual direct labor hours worked. It does not require the standard direct labor hours allowed, which is more relevant for calculating efficiency variances.