Concept explainers
1.
Concept Introduction:
Material overhead means difference between the budgeted material and in the actual material cost. There are 2 types of material variance, that is, material price variance and material quantity variance.
Direct labor cost variance is calculated by reducing the actual cost from the total budgeted cost of labor on product. Direct labor cost is 2 types which includes labor rate variance and labor quantity variance.
To Calculate:
a. Material price and quantity variance.
b. labor rate and efficiency variance.
2.
Concept Introduction:
Predetermined overhead is calculated by dividing the budgeted overhead from the standard labor hours or any other stated method. This rate is charged from customer.
Material overhead means difference between the budgeted material and in the actual material cost.
Direct labor cost variance is calculated by reducing the actual cost from the total budgeted cost of labor on product.
To Explain: Possible cause of above variances.
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Introduction to Managerial Accounting - Connect Access
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