Question

Which standard cost variance represents the difference between actual factory overhead incurred and budgeted factory overhead based on actual direct labour hours worked?

• A. Volume variance
• B. Spending variance
• C. Efficiency variance
• D. Quantity variance

Answer 1

Answer: (B)

Spending variance

Total Factory overhead variance is the difference between the actual factory overheads and budgeted factory overheads based on the actual direct labour hours worked.

This is also called as spending variance.