Overhead cost variance is:
A) The difference between the overhead costs actually incurred and the overhead budgeted at the actual operating level.
B) The difference between the actual overhead incurred during a period and the standard overhead applied.
C) The difference between actual and budgeted cost caused by the difference between the actual price per unit and the budgeted price per unit.
D) The costs that should be incurred under normal conditions to produce a specific product (or component) or to perform a specific service.
E) The difference between the total overhead cost that would have been expected if the actual operating volume had been accurately predicted and the amount of overhead cost that was allocated to products using the standard overhead rate.

Question

Quizplus · Accepted Answer

Overhead cost variance is the difference between the actual overhead costs incurred during a period and the standard overhead applied. This variance helps to identify any differences between the budgeted and actual costs of overheads. Option A refers to overhead spending variance, option C refers to price variance, and option D refers to normal cost. Option E refers to volume variance.

Overhead Cost Variance Is