Which one of the following describes the total overhead variance?

A) The difference between what was actually incurred and the flexible budget amount
B) The difference between what was actually incurred and overhead applied
C) The difference between the overhead applied and the flexible budget amount
D) The difference between what was actually incurred and the total production budget

Question

Briana Rhodes · Accepted Answer

Final Answer : B, Explanation :  The total overhead variance is calculated as the difference between the actual overhead costs incurred and the overhead costs that were applied based on the standard cost system. This measures how well the company controlled its overhead costs in relation to what was expected or planned.

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