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Total Variable Overheads Variances
If Variable Overhead Expenditure Variance = Shs.1, 330
Variable Overhead Efficiency Variance = Shs.320
Then total variable overheads variances is:
= Variable Overhead Expenditure Variance + Variable Overhead Efficiency Variance
= Shs.1, 330 (U) + Shs.320 (F) = Shs.1, 010 (U)
It can also be directly obtained with calculating the difference between the production cost absorbed and the actual variable overheads costs incurred in variance overheads as:
That is shs.13, 930 - (3,230 x 4) = Shs.13, 930 - Shs.12,920
= Shs.1, 010 (U)
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