When variable overhead spending variance is unfavorable, it can be safely assumed that ________.
A) actual rate per unit of cost-allocation base is higher than budgeted rate
B) actual quantity of cost-allocation base used is higher than budgeted quantity
C) actual rate per unit of cost-allocation base is lower than budgeted rate
D) actual quantity of cost-allocation base used is lower than budgeted quantity

Question

Quizplus · Accepted Answer

An unfavorable variable overhead spending variance occurs when the actual rate per unit of the cost-allocation base exceeds the budgeted rate, leading to higher costs than expected.

When Variable Overhead Spending Variance Is Unfavorable, It Can Be