The following information relates to Tallman, Inc.s overhead costs for the month:
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Requirements
Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
Explain why the variances are favorable or unfavorable.
Requirement Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
Begin by selecting the formulas needed to compute the variable overhead VOH and fixed overhead FOH variances, and then compute each variance amount.
Actual cost Standard costtimes Actual hours
Actual hours Standard hours allowed Standard cost
Actual overhead Budgeted overhead
Budgeted overhead Allocated overhead
