Variable overhead rate variances: It is a measure to determine the impact of the difference between standard variable overhead rate,i.e., the rate that should be paid and actual variable overhead rate,i.e., the rate which is actually paid for actual hours on the standard variable overhead. Variable overhead efficiency variances: It isa measure to determine the impact of the difference between standard number of hours worked and actual hours worked on the standard variable overhead. 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 the overhead which is actually incurred and is calculated by multiplying actual hourwith actual rate. Applied variable overhead: It is the overhead which should be incurred and is calculated by multiplying standard hour with standard rate. To compute: The variable overhead rate and efficiency variances and its over or under applied variable overhead.

Question

Want to see the full answer?

Answer 1

Question

Chapter 9, Problem 8E

To determine

Concept introduction:

Variable overhead rate variances:

It is a measure to determine the impact of the difference between standard variable overhead rate,i.e., the rate that should be paid and actual variable overhead rate,i.e., the rate which is actually paid for actual hours on the standard variable overhead.

Variable overhead efficiency variances:

It isa measure to determine the impact of the difference between standard number of hours worked and actual hours worked on the standard variable overhead.

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 the overhead which is actually incurred and is calculated by multiplying actual hourwith actual rate.

Applied variable overhead:

It is the overhead which should be incurred and is calculated by multiplying standard hour with standard rate.

To compute:

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

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

test test 123

Need assi

Consolidation after Several Years On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…