The Total Overhead Cost Variance Is Equal to the Difference

question 16

Multiple Choice

The total overhead cost variance is equal to the difference between

• A)fixed overhead costs and variable overhead costs.
• B)estimated overhead rate and applied overhead rate.
• C)actual overhead costs and variable overhead costs.
• D)actual overhead costs and standard overhead costs.

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Definitions:

Amortize

The process of spreading out a loan or intangible asset cost over a specific period of time for accounting and tax purposes.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer; it is not indicative of the security's market value.

Semiannually

Happening biannually or once every six months.

Market Interest Rate

The prevailing rate of interest available in the market on debt, which varies with market conditions and the term and risk of the investment.