When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .
Question
When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .
Solution
When the actual amount spent is more than the standard amount that should have been spent, the material spending variance is unfavorable.
Here's the step-by-step explanation:
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Material spending variance is a measure used in management accounting to capture the difference between the actual cost of direct material and its standard cost.
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A standard cost is the budgeted or planned cost of producing specific products or performing specific services.
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If the actual cost is higher than the standard cost, it means the company has spent more than planned. This is considered unfavorable because it indicates inefficiency or increased costs.
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Therefore, when the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is unfavorable.
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