The Variable Overhead Spending Variance Is Calculated as

question 127

Multiple Choice

The variable overhead spending variance is calculated as

• A)Actual cost − (actual quantity × standard price).
• B)Actual cost − (standard quantity × standard price).
• C)Standard cost − (actual quantity × actual price).
• D)Actual results minus the variable overhead flexible budget amount.

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Definitions:

Economic Model

A theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them.

Simplified

Made easier to understand or do; reduced in complexity.

Reality

The state of things as they actually exist, as opposed to how they may appear or may be thought to be.

Invisible Hand

A metaphor introduced by Adam Smith to describe how individuals pursuing their own interests unintentionally benefit society as a whole.