Chapter 8-5

Question 1

reconciles actual overhead incurred with allocated overhead by identifying variances for both variable and fixed overhead costs

Answer 1

4 variance analysis approach

Question 2

difference between actual variable overhead costs and budgeted costs based on actual hours
(variable overhead variances)

Answer 2

spending variance

Question 3

difference between budgeted costs based on actual hours and budgeted costs based on standard hours allowed for actual production
(variable overhead variances)

Answer 3

efficiency variance

Question 4

no production volume variance for variable overhead or fixed overhead

Answer 4

variable overhead
- variable costs adjust proportionately with production levels

Question 5

differences between actual fixed overhead costs and budgeted fixed overhead cost
(fixed overhead variances)

Answer 5

spending variance

Question 6

difference between budgeted fixed overhead costs and allocated fixed overhead costs based on actual production
(production volume variance)

Answer 6

production volume variance

Question 7

no efficiency variance for variable overhead of fixed overhead

Answer 7

fixed overhead
- fixed costs are not affected by operating efficiency

Question 8

combines the variance analysis for variable and fixed overhead into a unified presentation

Answer 8

4 variance analysis

Question 9

• interdependence variances =
• combined variance analysis =

Answer 9

• bad
• good