Chapter 9, Problem 15E

To determine

Concept introduction:

Variable overhead rate variances:

It is the difference between standard variable overhead rate and actual variable overhead rate and then multiplying it with actual hours.

Variable overhead efficiency variances:

It is the difference between standard and actual hours, then multiplying with standard rate.

Variable overhead spending variances:

It is the combined value of the variable overhead rate variance and variable overhead efficiency variance.

Actual variable overhead:

It is calculated by multiplying actual hour with actual rate.

Applied variable overhead:

It is calculated by multiplying standard hour with standard rate.

To compute:

The SC’s variable overhead rate and efficiency variances and its over or under applied variable overhead.