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Chapter_11_Day_2

# Chapter_11_Day_2 - ◦ Who is in charge Anyone in charge of...

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1)  Solve 1, 2, and the Variable OH Variances part  of 3
Predetermined OH Rate- Estimated total MOH cost/  Estimated total amount of the base Predetermine OH Rate= OH from the flexible budget at  the denominator level of activity/ Denominator level of  activity 375,000/50,000 MHs=7.50 per machine hour Fixed= 6 per machine hour Variable= 1.50 per machine hour

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Applying OH Overhead applied on the basis of standard hours not the  basis of actual hours (Chapter 3)
Two Variances Exist for Fixed OH 1) Budget Variance 2) Volume Variance Budget Variance= Actual Fixed OH Cost –  Budgeted Fixed OH Cost

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Unformatted text preview: ◦ Who is in charge? Anyone in charge of a given item of fixed OH. Deprecation, Supervisory Salaries, Insurance, Utilities, ect Volume Variance-Volume Variance=Fixed Component of predetermined OH*(Denominator Hours-Standard Hours Allowed) or Budgeted Fixed OH Cost- Fixed OH Applied Is actual output more or less than was expected based on determined denominator level of activity. Does not measure over or under spending. Its an activity based measure. Only explained by activity and controllable through activity. IE whoever controls the activity is responsible....
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