 Variable Overhead Spending Variance

This Variance determines the total effect of the difference in the Actual Variable Overhead rate
and the Standard Variable Overhead Rate. This can be represented as

(Actual Hours X Actual Variable Overhead Rate) – (Standard Variable Overhead Rate X Actual
Hours)

This is similar to variances in price of materials or variances in wage. However, unlike the
former, it is not an individual quantity by itself but is made up of a number of items such as
electricity, maintenance, indirect labour, etc.