Estimate fixed overhead variances, Cost Accounting

Assignment Help:

Estimate Fixed Overhead Variances

271_Estimate Fixed Overhead Variances.png

Referring to data, we can estimate the fixed overhead variances as given below:

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

Fixed Overhead Expenditure Variance is:

=  Actual Fixed Overheads - Budgeted Fixed Overheads

= Shs.12,100 - Shs.11,480 = Shs.620  (Unfavourable)

Fixed Overhead Capacity Variance is:

= Budgeted fixed Overheads - (Actual Hours x F.O. A. R)

=  Shs.11,480 - (3,150 x 3.5) = Shs.455 Unfavourable

Fixed Overhead Efficiency Variance is:

=  (Actual Hours x F.O.A.R) - (Standard Production Hours x F.O.A.R)

= (3,150 X 3.5) - #,230 X 3.5) = Shs.280 Favourable.

Fixed Overhead Volume Variance is:

= Fixed Overhead Capacity Variance + Fixed Overhead Efficiency Variance.

= 455 (U) + 280 (F) = Shs.175 (Unfavourable)

Fixed Overhead Variance is:

= Fixed Overhead Expenditure Variance + Fixed Overhead Volume Variance

= Shs.620 (Unfavourable) + Shs.175 (Unfavourable)

= Shs.795 (Unfavourable).

The approach described so long is the most generally used especially for examination.  Another cause that the student must be confident enough along with so long for further insights the student could proceed to the given section.


Related Discussions:- Estimate fixed overhead variances

Development and research cost budget, Development and Research Cost Budget ...

Development and Research Cost Budget These are costs that are discretional in nature such as they are determined on need basis via the managers concerned. Research cost is the

Apply the payback criterion and discounted payback criterion, Consider the ...

Consider the following two mutually exclusive projects:   Whichever project you choose, if any, you require a 15 percent return on your investment.   a. If you apply the payb

Compute the cost of goods - periodic inventory method, Beginning inventory ...

Beginning inventory on March 1 consisted of 2,000  units each costing $11.20 . During March, the following was purchased for inventory: Date Purchase

Prepare a cash budget, You have been asked to prepare a cash budget for Whi...

You have been asked to prepare a cash budget for Whitborrow plc for the next three months, October, November and December. The Managers are concerned that they may not have suffici

Purpose of cost accounting information, Purpose of Cost Accounting Informat...

Purpose of Cost Accounting Information Cost accounting is employed for a number of reasons, some of that are briefly described in the given points as: a) Accounting for co

Changes in variable cost and selling price per unit, Changes in Variable Co...

Changes in Variable Cost and Selling Price per Unit The contribution sales ratio is affected by any change in variable cost or selling price per unit. This ratio is a mea

EXPECTED CASH COLLECTIONS, WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PAT...

WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS

Variance analysis from a standard costing system, It may be dispute that  ...

It may be dispute that  in a  total quality environment, variance analysis  from a standard costing system is redundant.í Talk about the validity of this statement.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd