Fixed Overhead Spending/ Budget Variance : The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows: F i x e d O v e r h e a d B u d g e t V a r i a n c e = A c t u a l F i x e d O v e r h e a d − B u d g e t e d F i x e d O v e r h e a d Fixed Overhead Volume variance: The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost. The formula to calculate the Fixed Overhead volume Variance is as follows: F i x e d O v e r h e a d V o l u m e V a r i a n c e = A l l o c a t e d F i x e d O v e r h e a d − B u d g e t e d F i x e d O v e r h e a d Note: The allocated fixed overhead is calculated with the help of following formula: A l l o c a t e d f i x e d O v e r h e a d c o s t = Standard h o u r s × P r e d e t e r m i n e d f i x e d O v e r h e a d a l l o c a t i o n r a t e To calculate: Fixed Overhead Volume variance.

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Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 2.2GAP

To determine

Concept introduction:

Fixed Overhead Spending/ Budget Variance:

The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows:

Fixed Overhead Budget Variance = Actual Fixed Overhead − Budgeted Fixed Overhead

Fixed Overhead Volume variance:

The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost. The formula to calculate the Fixed Overhead volume Variance is as follows:

Fixed Overhead Volume Variance = Allocated Fixed Overhead − Budgeted Fixed Overhead

Note: The allocated fixed overhead is calculated with the help of following formula:

Allocated fixed Overhead cost = Standard hours ×Predetermined fixed Overhead allocation rate

To calculate:

Fixed Overhead Volume variance.

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Answer 2

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 2.2GAP

To determine

Concept introduction:

Fixed Overhead Spending/ Budget Variance:

The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows:

Fixed Overhead Budget Variance = Actual Fixed Overhead − Budgeted Fixed Overhead

Fixed Overhead Volume variance:

The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost. The formula to calculate the Fixed Overhead volume Variance is as follows:

Fixed Overhead Volume Variance = Allocated Fixed Overhead − Budgeted Fixed Overhead

Note: The allocated fixed overhead is calculated with the help of following formula:

Allocated fixed Overhead cost = Standard hours ×Predetermined fixed Overhead allocation rate

To calculate:

Fixed Overhead Volume variance.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 2.2GAP

To determine

Concept introduction:

Fixed Overhead Spending/ Budget Variance:

The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows:

Fixed Overhead Budget Variance = Actual Fixed Overhead − Budgeted Fixed Overhead

Fixed Overhead Volume variance:

The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost. The formula to calculate the Fixed Overhead volume Variance is as follows:

Fixed Overhead Volume Variance = Allocated Fixed Overhead − Budgeted Fixed Overhead

Note: The allocated fixed overhead is calculated with the help of following formula:

Allocated fixed Overhead cost = Standard hours ×Predetermined fixed Overhead allocation rate

To calculate:

Fixed Overhead Volume variance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 2.2GAP

To determine