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Standard cost system

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The standard cost system unfavorable variances are also equivalent to under-applied over head as to favorable variances are equivalent to over-applied overhead.

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Solution explains how the standard cost system unfavorable variances are also equivalent to under-applied over head as to favorable variances are equivalent to over-applied overhead.

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Hi,
Please see the response to your posting as below:

Under applied cost occurs when actual cost is greater than the allocated amount of overhead cost.
Example:
Let the standard overhead cost per unit be $2 per unit
And ...

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