To calculate the Variable Overhead Spending Variance, we can use the following formula:

$\text{Variable Overhead Spending Variance} = (\text{Actual Variable Overhead Rate} - \text{Standard Variable Overhead Rate}) \times \text{Actual Hours}$

Given Data

• Standard Variable Overhead Rate: $3.60 per unit
• Actual Variable Overhead Rate: $3.50 per unit
• Actual Hours: 43,900 machine hours

Calculation

1. Difference in Rates: $3.50 - 3.60 = -0.10$

2. Variance: $-0.10 \times 43,900 = -4,390$

Interpretation

The negative value indicates a favorable variance, as the actual variable overhead cost was lower than the standard rate.

Answer

The Variable Overhead Spending Variance for the year is $4,390 favorable.

Would you like further details on this calculation or have any additional questions?

Here are some related questions you might consider:

1. What is the variable overhead efficiency variance for the year?
2. How is the fixed overhead spending variance calculated?
3. What is the total overhead variance for the year?
4. How does machine hours affect overhead variances?
5. Why might actual overhead rates differ from standard rates?

Tip: Always distinguish between favorable and unfavorable variances; favorable means costs were lower than expected, while unfavorable means costs were higher.