Chapter 8-Study Information

Chapter 8-Study Information - variance includes both price...

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Accounting 230 Chapter 8--Study Information Horngren 13 th Ed. 1. You should be able to define the following terms: standard cost system and production volume variance. 2. You should be able to discuss why controlling overhead costs is important for any size organization. 3. You should be able to discuss the planning of variable and fixed overhead costs. 4. You should be able to compute the variable overhead spending and efficiency variances, label the variance as favorable or unfavorable, and understand some possible causes for the variances. 5. You should be able to understand and discuss why the variable overhead spending
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Unformatted text preview: variance includes both price and quantity variances. You should also be able to understand and discuss why the variable overhead efficiency variance measures the efficient or inefficient use of the activity driver of the overhead. 6. You should be able to compute the fixed overhead spending and production volume variances, label the variance as favorable or unfavorable, and understand some possible causes for the variances. 7. You should be able to explain and show that the sum of the four overhead variances equal the under- or overapplied overhead cost for the period....
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