Question

The variable overhead rate variance can be defined as which of the​ following? A. Standard rate x​ (Actual hours​ - Standard hours​ allowed) B. Actual rate x​ (Actual hours​ - Standard hours​ allowed) C. Standard hours allowed x​ (Actual rate​ - Standard​ rate) D. Actual hours x​ (Actual rate​ - Standard​ rate)

Answer 1

Answer:

Step-by-step explanation:

In costing analysis, direct materials, labour and direct expenses aggregate to prime cost.  Alternately, the aggregate of indirect materials, labour  and expenses is termed as overhead.  Overheads are classified into fixed and variable.

Variable overhead is one which varies directly as per number of units produced

Variable overhead rate variance = actual costs -(AHxSR)

= Actual costs - (Actual hours x std rate)

= Actual hours x actual rate - actual hours  x std rate

Hence option D is right.