Variable overhead expenditure variance, Cost Accounting

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Variable Overhead Expenditure 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
Actual Variable Overheads	13,930
Actual Labour Hours	3,150/hours
Standard Hours of Production	3,280 hours

= Actual Variable Overheads - (Actual labour hours x V.O.A.R)

= Shs.13, 930 - (3,150 x 4)

= Shs.13, 930 - Shs.12,600

= Shs.1, 330 Unfavourable

The variance is unfavourable since we spent more than allowed.

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