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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
Actual Results for December 2003
12,100
Actual Variable Overheads
13,930
Actual Labour Hours
3,150/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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