Variable Overhead Variances:
A

question 28

Essay

Variable overhead variances:
a. Variable overhead spending variance:
$\begin{array}{|l|l|}\hline \text { Budgeted variable overhead for actual hours } & \\\hline \text { (\$5.00/hr' } 10,900 \mathrm{hr}) & \$ 54,500 \\\hline \text { Less actual variable overhead costs } & 55.100 \\\hline \text { Variable overhead spending variance } & \$ 600(\mathrm{U}) \\\hline\end{array}$

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Definitions:

Economic Profits

The difference between the total revenue from sales and the total costs of production, including both explicit and implicit costs, representing excess earnings above the normal profit level.

Demand Curve

An illustrated curve that demonstrates how demand for a product decreases as its price increases, commonly presented with a downward trajectory.

Average Total Cost

The cost per unit of output, calculated by dividing the total cost (both fixed and variable) by the total quantity produced.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.