Concept explainers
Concept introduction:
Variable
It is the difference between standard variable overhead rate and actual variable overhead rate and then multiplying it with actual hours.
Variable overhead efficiency variances:
It is the difference between standard and actual hours, then multiplying with standard rate.
Variable overhead spending variances:
It is the combined value of the variable overhead rate variance and variable overhead efficiency variance.
Actual variable overhead:
It is calculated by multiplying actual hour with actual rate.
Applied variable overhead:
It is calculated by multiplying standard hour with standard rate.
To compute:
The SC’s variable overhead rate and efficiency variances and its over or under applied variable overhead.
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EBK MANAGERIAL ACCOUNTING
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