Question

relevant information for the production of material a follows: actual variable overhead cost per hour $8.00 standard variable overhead cost per hour $7.50 actual hours 4,500 standard hours 5,000 what is the variable overhead spending variance for material a?

Answer 1

The correct calculation for the variable overhead spending variance is:

Variable Overhead Spending Variance = (Actual Variable Overhead - Standard Variable Overhead)

Plugging in the given values, we get:

Variable Overhead Spending Variance = ($8.00 x 4,500) - ($7.50 x 4,500)
Variable Overhead Spending Variance = $36,000 - $33,750
Variable Overhead Spending Variance = $2,250

Therefore, the variable overhead spending variance for material A is $2,250.