This video shows how to calculate the variable overhead spending variance.

The variance overhead spending variance is the difference between:

(1) actual activity base (e.g., machine hours) * actual variable overhead rate and

(2) actual activity base (e.g., machine hours) * standard variable overhead rate

This is sometimes abbreviated as: (AH * AR) – (AH * SR)

If the company spent more than it should have (according to the standard, which is set by management), then the variable overhead spending variance is unfavorable.