The most common reason for a variance between actual overhead costs and applied overhead costs is the actual level of volume does not equal the level used to calculate the budgeted overhead rate.

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This is a common reason for a variance in overhead costs as the budgeted overhead rate is calculated based on a predetermined level of volume, and any deviation from that volume level can result in a variance between actual and applied overhead costs.

The Most Common Reason for a Variance Between Actual Overhead