b. Compute overhead variances using a three-variance approach.OH Spending VarianceActual OHBudget at Actual = OH Spending Variance$2$0 = $OH Efficiency VarianceBudget at ActualBudget at Standard = OH Efficiency Variance$2$0 = $Volume VarianceBudget at StandardApplied OH= Volume Variance2$0 = $c. Compute overhead variances using a two-variance approach.Budget VarianceActual OHBudgeted OH =Budget Variance-$2$0 = $Volume VarianceBudgeted OHApplied OH= Volume Variance0 = $ OH variancesThe manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a new car. In Bexar County, thepredetermined fixed overhead rate was computed on an estimated 26,000 direct labor hours per month and is $9 per direct labor hour, whereas the predetermined variable overheadrate is $3 per direct labor hour.During July, 48,880 cars were registered in Bexar County, and 24,700 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $72,020 andfixed overhead was $236,080.Note: In answering the following questions, do not use negative signs with your answers.a. Compute overhead variances using a four-variance approach.VOH Spending VarianceActual VOHBudgeted VOH = VOH Spending Variance2$0 = $F-VOH Efficiency VarianceBudgeted VOHApplied VOH =VOH Efficiency Variance2$2$0 = $UFOH Spending VarianceActual FOHBudgeted FOH= FOH Spending Variance2$0 =O FFOH Volume VarianceBudgeted FOHApplied FOH =FOH Volume Variance$40 = $

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Description: b. Compute overhead variances using a three-variance approach.OH Spending VarianceActual OHBudget at Actual = OH Spending Variance$2$0 = $OH Efficiency VarianceBudget at ActualBudget at Standard = OH Efficiency Variance$2$0 = $Volume VarianceBudget

1. Budgeted variance 2. Volume variance 3. Overhead variance

Answered: Compute overhead variances using a…

Business

Accounting

Compute overhead variances using a three-variance approach.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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