diff --git a/public/app/features/dashboard-scene/scene/DataLayerControl.tsx b/public/app/features/dashboard-scene/scene/DataLayerControl.tsx
index 3fc19bb2a3d..21691a0c2f9 100644
--- a/public/app/features/dashboard-scene/scene/DataLayerControl.tsx
+++ b/public/app/features/dashboard-scene/scene/DataLayerControl.tsx
@@ -64,6 +64,7 @@ const getStyles = (theme: GrafanaTheme2) => ({
     display: 'flex',
     alignItems: 'center',
     gap: theme.spacing(1),
+    padding: theme.spacing(1),
   }),
   controlWrapper: css({
     height: theme.spacing(2),
diff --git a/public/app/features/dashboard-scene/scene/VariableControls.tsx b/public/app/features/dashboard-scene/scene/VariableControls.tsx
index 3509848c442..1061938e5e6 100644
--- a/public/app/features/dashboard-scene/scene/VariableControls.tsx
+++ b/public/app/features/dashboard-scene/scene/VariableControls.tsx
@@ -82,19 +82,39 @@ export function VariableValueSelectWrapper({ variable, inMenu }: VariableSelectP
   // For switch variables in menu, we want to show the switch on the left and the label on the right
   if (inMenu && sceneUtils.isSwitchVariable(variable)) {
     return (
-      <div className={styles.switchMenuContainer} data-testid={selectors.pages.Dashboard.SubMenu.submenuItem}>
+      <div
+        className={cx(
+          styles.switchMenuContainer,
+          isSelected && 'dashboard-selected-element',
+          isSelectable && !isSelected && 'dashboard-selectable-element'
+        )}
+        onPointerDown={onPointerDown}
+        data-testid={selectors.pages.Dashboard.SubMenu.submenuItem}
+      >
         <div className={styles.switchControl}>
           <variable.Component model={variable} />
         </div>
-        <VariableLabel variable={variable} layout={'vertical'} className={styles.switchLabel} />
+        <VariableLabel
+          variable={variable}
+          layout={'vertical'}
+          className={cx(isSelectable && styles.labelSelectable, styles.switchLabel)}
+        />
       </div>
     );
   }
 
   if (inMenu) {
     return (
-      <div className={styles.verticalContainer} data-testid={selectors.pages.Dashboard.SubMenu.submenuItem}>
-        <VariableLabel variable={variable} layout={'vertical'} />
+      <div
+        className={cx(
+          styles.verticalContainer,
+          isSelected && 'dashboard-selected-element',
+          isSelectable && !isSelected && 'dashboard-selectable-element'
+        )}
+        onPointerDown={onPointerDown}
+        data-testid={selectors.pages.Dashboard.SubMenu.submenuItem}
+      >
+        <VariableLabel variable={variable} layout={'vertical'} className={cx(isSelectable && styles.labelSelectable)} />
         <variable.Component model={variable} />
       </div>
     );
@@ -164,11 +184,13 @@ const getStyles = (theme: GrafanaTheme2) => ({
   verticalContainer: css({
     display: 'flex',
     flexDirection: 'column',
+    padding: theme.spacing(1),
   }),
   switchMenuContainer: css({
     display: 'flex',
     alignItems: 'center',
     gap: theme.spacing(1),
+    padding: theme.spacing(1),
   }),
   switchControl: css({
     '& > div': {
diff --git a/public/app/features/dashboard-scene/scene/dashboard-controls-menu/DashboardControlsMenu.tsx b/public/app/features/dashboard-scene/scene/dashboard-controls-menu/DashboardControlsMenu.tsx
index 9d27ee01f0f..edec4d05659 100644
--- a/public/app/features/dashboard-scene/scene/dashboard-controls-menu/DashboardControlsMenu.tsx
+++ b/public/app/features/dashboard-scene/scene/dashboard-controls-menu/DashboardControlsMenu.tsx
@@ -1,4 +1,4 @@
-import { css, cx } from '@emotion/css';
+import { css } from '@emotion/css';
 
 import { GrafanaTheme2 } from '@grafana/data';
 import { SceneDataLayerProvider, SceneVariable } from '@grafana/scenes';
@@ -17,8 +17,6 @@ interface DashboardControlsMenuProps {
 }
 
 export function DashboardControlsMenu({ variables, links, annotations, dashboardUID }: DashboardControlsMenuProps) {
-  const styles = useStyles2(getStyles);
-
   return (
     <Box
       minWidth={32}
@@ -29,7 +27,7 @@ export function DashboardControlsMenu({ variables, links, annotations, dashboard
       direction={'column'}
       borderRadius={'default'}
       backgroundColor={'primary'}
-      padding={1.5}
+      padding={1}
       gap={0.5}
       onClick={(e) => {
         // Normally, clicking the overlay closes the dropdown.
@@ -39,7 +37,7 @@ export function DashboardControlsMenu({ variables, links, annotations, dashboard
     >
       {/* Variables */}
       {variables.map((variable, index) => (
-        <div className={cx({ [styles.menuItem]: index > 0 })} key={variable.state.key}>
+        <div key={variable.state.key}>
           <VariableValueSelectWrapper variable={variable} inMenu />
         </div>
       ))}
@@ -47,7 +45,7 @@ export function DashboardControlsMenu({ variables, links, annotations, dashboard
       {/* Annotation layers */}
       {annotations.length > 0 &&
         annotations.map((layer, index) => (
-          <div className={cx({ [styles.menuItem]: variables.length > 0 || index > 0 })} key={layer.state.key}>
+          <div key={layer.state.key}>
             <DataLayerControl layer={layer} inMenu />
           </div>
         ))}
@@ -79,10 +77,7 @@ function MenuDivider() {
 
 const getStyles = (theme: GrafanaTheme2) => ({
   divider: css({
-    marginTop: theme.spacing(2),
+    marginTop: theme.spacing(1),
     padding: theme.spacing(0, 0.5),
   }),
-  menuItem: css({
-    marginTop: theme.spacing(2),
-  }),
 });