The Overhead Spending Variance

question 98

Multiple Choice

The overhead spending variance:

• A)Occurs automatically whenever actual production levels differ from the "normal" production level used to compute the standard overhead cost per unit.
• B)Is the difference between amounts spent for actual manufacturing overhead costs and the amount applied to production.
• C)Is computed as the difference between variable overhead per the flexible budget and actual variable overhead costs incurred.
• D)Is the portion of the total overhead variance that is considered "controllable" by the production manager.

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Definitions:

Expected Rate

A forecasted value, often referring to interest or growth rates, based on current and historical data.

Expected Rate

In finance, it typically refers to the predicted average rate of return on an investment over a specified period.

Standard Deviation

A statistical measure that quantifies the amount of variability or dispersion of a set of data values around the mean (average).

Risk-Free Asset

A financial instrument that is considered to have no risk of financial loss and typically features a guaranteed rate of return, such as government bonds.