Peterson Inc.uses direct labour hours as the cost driver for variable overhead.In order to calculate the variable overhead spending variance,which of the following items does not need to be known?
A) Actual overhead costs
B) Actual direct labour hours
C) Standard variable overhead rate per direct labour hour
D) Standard direct labour hours allowed

Question

Quizplus · Accepted Answer

The variable overhead spending variance focuses on the difference between the actual overhead costs incurred and what those costs should have been for the actual level of activity. It requires knowing the actual overhead costs (A), the actual direct labour hours worked (B), and the standard variable overhead rate per direct labour hour (C) to calculate. The standard direct labour hours allowed (D) are not needed for this specific variance calculation; they are more relevant for the variable overhead efficiency variance.