1. How is the predetermined overhead rate determined when standard costs are used?
2. What is the difference between a favorable cost variance and an unfavorable cost variance?
3. In each of the following formulas, supply the words that should be inserted for each number in parentheses.
(a) (Actual quantity 3 (1)) 2 (Standard quantity 3 (2)) 5 Total materials variance
(b) ((3) 3 Actual price) 2 (Actual quantity 3 (4)) 5 Materials price variance
(c) (Actual quantity 3 (5)) 2 ((6) 3 Standard price) 5 Materials quantity variance