The variable overhead spending variance = standard price × (actual labor hours - standard labor hours)

Question

Quizplus · Accepted Answer

The variable overhead spending variance is calculated as the difference between the actual variable overhead costs incurred and the standard variable overhead costs that should have been incurred for the actual production level, not based on labor hours difference. It is typically calculated as (Actual Variable Overhead Rate - Standard Variable Overhead Rate) × Actual Activity Level.

The Variable Overhead Spending Variance = Standard Price × (Actual