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 Journal Entry : In journal entry company records all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal. To indicate: The Journal entry for Fixed Overhead Cost and related variances.

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Answer 1

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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 4GAP

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

Journal Entry: In journal entry company records all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To indicate:

The Journal entry for Fixed Overhead Cost and related variances.

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During 20x2 Creswell Corporation sold $5,500 of inventory on credit. The company's beginning and ending accounts receivable balances were $30,000 and $32,500, respectively. How much cash did Creswell Corporation collect on the account? If the ending accounts receivable had been $27,000, how much cash would Creswell Corporation have collected?

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 4GAP

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

Journal Entry: In journal entry company records all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To indicate:

The Journal entry for Fixed Overhead Cost and related variances.

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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 4GAP

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

Journal Entry: In journal entry company records all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To indicate:

The Journal entry for Fixed Overhead Cost and related variances.

Expert Solution & Answer

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Check out a sample textbook solution

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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 4GAP

To determine