The variable overhead spending variance is expressed as the difference between:
A) the standard variable overhead and the budgeted variable overhead based on actual hours used to produce the actual output.
B) the actual variable overhead and the budgeted variable overhead based on actual hours used to produce the budgeted output.
C) the actual variable overhead and the budgeted variable overhead based on actual hours used to produce the actual output.
D) the actual variable overhead and the standard variable overhead based on actual hours used to produce the standard output.
E) None of these

Question

Quizplus · Accepted Answer

The variable overhead spending variance is the difference between the actual variable overhead (the cost actually incurred for variable overhead) and the budgeted variable overhead based on actual hours used to produce the actual output (the amount of variable overhead that should have been incurred based on the actual output produced). Option A is talking about the variable overhead efficiency variance, option B is incorrect as it refers to the budgeted output instead of the actual output, option D is talking about the variable overhead efficiency variance, and option E is not correct as there is a correct answer.

The Variable Overhead Spending Variance Is Expressed as the Difference