What Is the Formula for the Fixed Overhead Spending Variance

question 45

Multiple Choice

What is the formula for the fixed overhead spending variance?

• A)Standard fixed overhead rate * Standard hours
• B)AFOH - BFOH
• C)Applied fixed overhead - Budgeted fixed overhead
• D)(AH - SH) * SVOR

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Definitions:

Automotive Engines

The power units of vehicles, designed to convert fuel into mechanical energy to enable motion.

Labor Rate Variance

The difference between the actual labor rate paid and the standard labor rate expected, indicating over or underpayment.

Budget Variance

The difference between the budgeted amount of expense or revenue, and the actual amount of expense or revenue incurred.

Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is usually driven by a difference in actual production volume and the expected production volume.