To Compute the Variable Overhead Cost Variance,first Compute the Difference

question 60

True/False

To compute the variable overhead cost variance,first compute the difference between actual cost and standard cost.Then,multiple this difference by standard quantity.

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Definitions:

Raw Materials Purchases

The acquisition of materials that are directly used in the manufacturing of products.

Production Needs

The specific requirements for manufacturing including materials, labor, and overhead to meet demand.

Master Budget

An all-encompassing financial plan for a company, consolidating all its individual budgets related to sales, cost of goods sold, operating expenses, assets, liabilities, and cash flows.

Direct Labor

The wages and related expenses for workers who are directly involved in the production of goods.