Acompany has gathered the following information from a recent production run:
* standard variable overhead rate - $10
* actual variable overhead rate - $8
* standard process hours - 20
* actual process hours - 25
what is the company’s variable overhead spending variance?

Variable Overhead Spending variance = $50 Favorable

Explanation:

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

We are provided the following details as follows:

Standard variable overhead rate = $10

Actual variable overhead rate = $8

Actual hours of overhead = 25

Therefore, putting values in above we have,

Variable Overhead Spending variance = ($10 - $8) 25 = $50

The variance is favorable as standard rate = $10 and actual rate = $8, actual is less than standard.

Variable Overhead Spending variance = $50 Favorable

answer; normative economics;