Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 30

Refer to the variances you calculated in conjunction with 15-28 and to the information in 15-23 and 15-25. Give the appropriate journal entries to record: (a) the net overhead variance is actual and applied overhead costs for the year (both variable and fixed), and (b) the net overhead variance is the three manufacturing cost variances calculated in 15-28.

Step 1 of 2

Variance and budget v/s variance:

In costing, variance is a difference occurred between planned, standard or budgeted cost and the actual cost incurred. These variances can be for both cost and revenue. These variances can be favourable or unfavourable.