Use the following information to answer the next question(s):
The standard cost sheet for one of the Vitton Company's products is presented below.
*Rate based on expected activity of 12,000 hours
The following results for last year were recorded.

-The variable overhead spending variance is
A) $4,500 favourable.
B) $4,500 unfavourable.
C) $4,800 favourable.
D) $4,800 unfavourable.

Question

Use the following information to answer the next question(s):
The standard cost sheet for one of the Vitton Company's products is presented below.
  *Rate based on expected activity of 12,000 hours
The following results for last year were recorded.
 
-The variable overhead spending variance is
A) $4,500 favourable. 
B) $4,500 unfavourable. 
C) $4,800 favourable. 
D) $4,800 unfavourable.

Quizplus · Accepted Answer

The variable overhead spending variance is favourable when the actual variable overhead costs are less than the budgeted variable overhead costs. In this case, the actual variable overhead costs are $4,500 less than the budgeted variable overhead costs, so the variable overhead spending variance is $4,500 favourable.

Use the Following Information to Answer the Next Question(s)