Chapter 9, Problem 9ME

To determine

Concept introduction:

Variable overhead rate variances:

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

Variable overhead efficiency variances:

It is the difference between standard and actual hours, than 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 multipling actual hourwith actual rate.

Applied variable overhead:

It is calculated by multipling standard hour with standard rate.

To compute:

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