How Do You Calculate Variable Overhead Rate Variance?
Variable overhead rate variance is calculated by subtracting the actual variable overhead rate per hour from the standard variable overhead rate per hour, and multiplying the difference by the actual amount of hours worked. The formula for variable overhead rate variance is: (Actual variable overhead rate per hour – Standard variable overhead rate per hour) x Actual hours worked. A positive variance means that the actual variable overhead rate was higher than the standard rate, while a negative variance means that the actual rate was lower than the standard rate.