Variable overhead efficiency variance, Cost Accounting

Variable Overhead Efficiency Variance

Budget for December 2003;


Fixed Overheads


Variable Overheads


Labour Hours

3,280 hours

Standard Hours of Production

3,280 hours

Actual Results for December 2003


Fixed Overheads


Variable Overheads


Actual Labour 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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