The variable overhead rate variance can be defined as which of the following? A. Standard rate x (Actual hours - Standard hours allowed) B. Actual rate x (Actual hours - Standard hours allowed) C. Standard hours allowed x (Actual rate - Standard rate) D. Actual hours x (Actual rate - Standard rate)

Step-by-step explanation:

In costing analysis, direct materials, labour and direct expenses aggregate to prime cost. Alternately, the aggregate of indirect materials, labour and expenses is termed as overhead. Overheads are classified into fixed and variable.

Variable overhead is one which varies directly as per number of units produced

Variable overhead rate variance = actual costs - (AHxSR)

= Actual costs - (Actual hours x std rate)

= Actual hours x actual rate - actual hours x std rate

Hence option D is right.