COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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actual overhead costs and overhead costs applied based on standard hours allowed.
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actual overhead costs and overhead costs applied based on actual hours.
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overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed.
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the actual overhead costs and the standard direct labor costs.
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Detailed explanation-1: -The total overhead variance is the difference between the The actual overhead costs and the standard direct labor costs. actual overhead costs and overhead costs applied based on standard hours allowed.
Detailed explanation-2: -Key Points Total Overhead Variance: The difference between the standard cost of overhead permitted for the actual output obtained, and the actual overhead cost incurred is known as overhead cost variance. In other words, overhead cost variance is the difference between under and over absorption of overheads.
Detailed explanation-3: -Variable overhead spending variance is the difference between actual variable overhead cost, which is based on the costs of indirect materials involved in manufacturing, and the budgeted costs called the standard variable overhead costs.
Detailed explanation-4: -It can be calculated using the following formula: Fixed Overhead Volume Variance = Applied Fixed Overheads – Budgeted Fixed Overhead. Here, Applied Fixed Overheads = Standard Fixed Overheads × Actual Production.