Concept explainers
Concept Introduction:
Overhead expense comprises of two elements which are (i) Variable
The difference between the Actual Overheads and Standard Overheads can be of two reasons.
Reason 1 − Difference in volume of production
Reason 2 − Difference in rate of overheads
While the difference in rate is considered as controllable variance, the other is non controllable and it is called as Overhead Volume Variance.
Thus Overhead Cost Variance is sum of Overhead Controllable Variance and Overhead Volume Variance.
The formula for calculating Overhead Cost Variances are as follows:
Overhead Cost Variance (OCV) = Overhead Volume Variance (OVV) + Overhead Controllable/Price Variance (OPV)
Also, OCV = Standard Overhead applied to production − Actual Overhead cost
Actual the total overhead cost

Want to see the full answer?
Check out a sample textbook solution
Chapter 23 Solutions
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
- The Caldwell Division's operating data for the year 2019 is as follows: • Return on investment = 14% • • • Minimum required rate of return = 11% Average net operating assets = $620,000 Sales $2,100,000 = Compute the margin for 2019.arrow_forwardFinancial accountingarrow_forwardPlease give me true answer this financial accounting questionarrow_forward
- Please given answer accounting questionarrow_forwardA business has a profit margin of 18% on total sales of $50,000,000. The firm holds total debt of $15,000,000, total assets of $60,000,000, and an after-tax interest cost on total debt of 6%. Determine the firm's Return on Assets (ROA).arrow_forwardProvide correct MCQ option.?? Accountingarrow_forward
- Need solution. General accountingarrow_forwardTownsend Manufacturing has a predetermined overhead rate of $5 per machine hour. Last year, the company incurred $128,700 of actual manufacturing overhead cost, and the account was $4,500 over-applied. How many machine hours were used during the year?arrow_forwardGeneral Accountingarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





