Question

1) The *variable overhead spending variance* measures the difference between ________, multiplied by the actual quantity of variable overhead cost-allocation base used.

A) the actual variable overhead cost per unit and the budgeted variable overhead cost per unit
B) the standard variable overhead cost rate and the budgeted variable overhead cost rate
C) the actual variable overhead cost per unit and the budgeted fixed overhead cost per unit
D) the actual quantity per unit and the budgeted quantity per unit

Answer 1

The *variable overhead spending variance* measures the difference between the standard variable overhead cost rate and the budgeted variable overhead cost rate multiplied by the actual quantity of variable overhead cost-allocation base used.

The correct option is B.

Explanation:

The variable overhead spending variance compares the standard variable overhead cost rate (the cost rate per unit of the variable overhead cost-allocation base set in the budget) with the budgeted variable overhead cost rate. The variance is computed by finding the difference between these rates and then multiplying that difference by the actual quantity of the variable overhead cost-allocation base used.

So, the correct option is B.