Question

The total overhead variance is the difference between actual overhead costs and budgeted overhead costs. True False

Answer 1

The difference between the realized overheads and the estimated overheads is the total overhead cost.

What are total overhead costs?

Total overhead costs are identified as the costs related to administration, sales, marketing, and production. Before the total overhead costs are realized, a budget regarding estimated costs is prepared.

The calculation of the total overhead costs is actual overhead costs less the budgeted overhead costs.

Hence, the aforementioned statement regarding total overhead costs holds true.

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