Variable Overhead Efficiency Variance

Budget for December 2003;	Shs.
Fixed Overheads	11,480
Variable Overheads	13,120
Labour Hours	3,280 hours
Standard Hours of Production	3,280 hours
Actual Results for December 2003	Shs.
Fixed Overheads	12,100
Variable Overheads	13,930
Actual Labour Hours	3,150/hours
Standard Hours of Production	3,280 hours

Variable Overhead Efficiency Variance = (actual labour hours x V.O.A.R) - (standard hour of production x V.O.A.R)

                                                     = (3,150 x 4) - (3,230 x 4)

                                                     = Shs.12,600 - Shs.12,920

                                                     = Shs.320  Favourable

The variance is favourable since we spent less than the standard cost.

Posted Date: 2/7/2013 7:13:11 AM | Location : United States

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