A company must understand overhead variances just as it does those related to direct labor and...

 

Transcribed Image Text:

A company must understand overhead variances just as it does those related to direct labor and direct material. The following statements relate to overhead variances. a. In the calculation of the variable overhead variance, the standard number of hours allowed for actual production multiplied by the variable predetermined overhead rate (1.e., SH X SVR) is the amount of actual variable overhead. b. The variable overhead efficiency variance indicates how efficiently a company used the base chosen to apply overhead to the cost of a product. C. Fixed overhead variances consist of a volume variance and a spending variance. d. The fixed overhead volume variance can be interpreted as favorable or unfavorable just as any other variance can. e. The fixed overhead volume variance is the difference between the budgeted fixed overhead and the applied fixed overhead. Required Indicate whether each of the preceding statements is true or false. A company must understand overhead variances just as it does those related to direct labor and direct material. The following statements relate to overhead variances. a. In the calculation of the variable overhead variance, the standard number of hours allowed for actual production multiplied by the variable predetermined overhead rate (1.e., SH X SVR) is the amount of actual variable overhead. b. The variable overhead efficiency variance indicates how efficiently a company used the base chosen to apply overhead to the cost of a product. C. Fixed overhead variances consist of a volume variance and a spending variance. d. The fixed overhead volume variance can be interpreted as favorable or unfavorable just as any other variance can. e. The fixed overhead volume variance is the difference between the budgeted fixed overhead and the applied fixed overhead. Required Indicate whether each of the preceding statements is true or false.

Answer rating: 100% (QA)

Answer aOption A is True The total overhead cost variance can be subdivided into a budget or spendin... View the full answer