Variable overhead variance, Cost Accounting

Assignment Help:

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


Related Discussions:- Variable overhead variance

Match the item below by entering the appropriate code letter, Match the ite...

Match the items below by entering the appropriate code letter A. Controller B. Deficit C. Payout Ratio D. Stock Dividend E. Declaration Date F. Preemptive right G. Par Value H. L

Planning Budgetting, Bugga Corp expects to sell 3,000 units in October, and...

Bugga Corp expects to sell 3,000 units in October, and expects sales to increase 20% each month thereafter. Sales price is expected to stay constant at $8 per unit. What are budge

Calculate discounted cash flow, The Integrated Management Project is to be ...

The Integrated Management Project is to be based on an organisation, a strategic business unit, or profit centre that has good potential for growth and development. The brief is to

Decision making cycle, Decision Making Cycle Steps in decision-making ...

Decision Making Cycle Steps in decision-making cycle are as: a) Clearly define the objective that is to be the focus of the decision. This is significant in order that the

Net cash inflow, Holmes Electronics' Canadian Branch will help introduce in...

Holmes Electronics' Canadian Branch will help introduce into Canada the just developed new electronic device which, when mounted on an automobile, will tell the driver how many mil

What is the marginal cost, Marginal Cost (MC): The marginal cost of an a...

Marginal Cost (MC): The marginal cost of an additional unit of output is the cost of the additional inputs required to make that output. More formally, the marginal cost is the

Uniform Capitalization rules, Are public service corporations subject to un...

Are public service corporations subject to uniform capitalization rules?

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