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

Calculate the breakeven fee income, A company provides several different se...

A company provides several different services to its customers from a single office. Fixed costs of the office, including staff costs, are absorbed into the company's service costs

Cvp and computer applications, CVP and Computer Applications The broad...

CVP and Computer Applications The broad availability of personal computers encourages more managers to apply cost volume profit analysis. Computers can quickly create the comp

Job costing, Job Costing This is a costing method that is applied whe...

Job Costing This is a costing method that is applied when a job or cost unit is relatively of small size, is undertaken to fit the customer's specifications and is of compara

Cash budget - budgetary planning and control, Cash Budget - Budgetary Plann...

Cash Budget - Budgetary Planning and Control This can records the cash outflows and inflows that are expected to take place in respect of every functional budget. This may be

Calculate labour time or efficiency variance, standard hours = 5000 standa...

standard hours = 5000 standard wages = Rs.3/hr actual hours worked = 5600 hrs actual wages paid = 17920

Profit or loss on the disposal of the fixtures and fittings, This task invo...

This task involves the recording of non-current asset information in the general (nominal, main) ledger and other non-current asset matters. You are assisting in preparing the a

Assessment item 2, rocess costing Prepare a spreadsheet to solve the follow...

rocess costing Prepare a spreadsheet to solve the following process costing problem. Review the four process costing videos provided in Interact Resources. Note that in the situati

Assumptions of break-even analysis, Assumptions of Break-Even Analysis ...

Assumptions of Break-Even Analysis 1. The break-even chart is fundamentally a static analysis; commonly changes can merely be displayed by drawing a new chart or a series of c

Cost sheet, what is a cost sheet? what are its advantages?

what is a cost sheet? what are its advantages?

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