Let AP = actual price the company pays for variable overhead costs per direct labor hour, SP = the standard price the company planned to pay for variable overhead per direct labor hour, AH = the actual direct labor hours used, and SH = the standard direct labor hours for a given level of production. The variable overhead spending variance equals

Question

Quizplus · Accepted Answer

The variable overhead spending variance is calculated as the difference between the actual cost per unit of variable overhead (AP) and the standard cost per unit of variable overhead (SP) multiplied by the actual quantity of the allocation base used (AH), which is AH × (AP - SP).

Let AP = Actual Price the Company Pays for Variable