Variable overhead variance, Cost Accounting

Variable Overhead Variance

This is the dissimilarity between the variable overheads absorbed and the actual variable overheads warned. Therefore it can be described as the under-absorbed or over-absorbed variable overheads.

The variable overhead expenditure variance is made up of two components as given below:

a) The variable overhead efficiency variance,

b) The variable overhead expenditure variance

The variable overhead expenditure variable is the dissimilarity between the allowed variable overheads and the actual variable overheads incurred based on the actual hours worked.  This is calculated as specified:

Variable Overhead Expenditure variance = Actual Variable Overheads - (Actual Labour Hours x V.O. A. R).

The variable overhead efficiency variance is the difference between the absorbed variable overheads and the allowed variable overheads and the absorbed variable overheads.  It is calculated as given:

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

Recap:

The above discussion of variable overhead variances can be summarized as given below:

2224_Variable Overhead Variance.png

Posted Date: 2/7/2013 7:05:22 AM | Location : United States







Related Discussions:- Variable overhead variance, Assignment Help, Ask Question on Variable overhead variance, Get Answer, Expert's Help, Variable overhead variance Discussions

Write discussion on Variable overhead variance
Your posts are moderated
Related Questions
Managerial ACCT 2 Ulrich Framing is well known for the quality of its picture framing. Lucinda Ulrich, CEO, believes that the number of linear feet or framing used is the best is t

why is determining the cost to manufacture a product quite a different activity from determining how to control such cost?

Describe the information about cost sheets? Ans) Cost sheet having of the direct and indirect expenses acquired in producing a given product and classifying the expenses acquire

Standards and Budgets Budgets like you recall from the previous section, are simply plans for expected future performance expressed in quantified monetary terms. Therefore the

i want to understand everything about contract account

responsibility of director of finance and logistics

Incremental Costs as Relevant Costs An incremental cost is specifically incurred with the following a course of action and ignorable if such action is not implemented. It cont

Traditional income statement: The DU Inn is an 80-room hotel located on some mountaintop in Colorado. It has no bar or restaurant and is positioned as a mid-priced, good quality

This is the amount charged due to the usage and passage of time. Fixed assets are utilized for earning revenue. Thus, a decrease in their value is considered to be the operational

Are public service corporations subject to uniform capitalization rules?