Variable overhead rate variance
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Variable overhead rate variance is also called the variable overhead spending variance. This variance tells managers whether more or less was spent on variable overhead than they expected would be spent for the hours worked. It is calculated as follows: AH X (AR - SR).
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Variable overhead rate variance. Also called the variable overhead spending variance. This variance tells managers whether more or less was spent on variable overhead than they expected would be spent for the hours worked. It is calculated as follows: AH X (AR - SR).
