Chapter 26, Problem 12E

(a)

To determine

Variances: The variances are used to calculate the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference in between cost that is actually incurred and cost which was estimated by the business.

Total Overhead Variance: Total overhead variance is the difference between actually incurred overhead cost and overhead cost applied on the basis of estimated hours required to produce amount of goods.

To determine: The predetermined variable overhead rate and the predetermined fixed overhead rate.

(b)

To determine

The applied overhead for B Company for the year.

(c)

To determine

the total overhead variance.