When machine hours are used as an overhead cost-allocation base, the most likely cause of a favorable variable overhead spending variance is using more machine hours than budgeted.
A spending variance, additionally known as a charge variance, refers to the difference between the real and budgeted amount of a price. If a corporation incurs a $250 rate for utilities in January and is expected to incur a $150 expense, there's a $one hundred negative spending variance.
The production department is typically answerable for damaging variable overhead spending variance. extra from general costing and variance analysis (motives): rationalization of standards and general costing. difference between requirements and budgets.
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