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

Activity based costing, As controller for Edmonton Cosmetic Hospital, you a...

As controller for Edmonton Cosmetic Hospital, you are looking into the possibility of utilizing Activity- Based-Costing to assign overhead costs to patient surgeries. As a first st

Generally accepted accounting principles, Generally Accepted Accounting Pri...

Generally Accepted Accounting Principles (GAAP) -Rules, conventions and procedures essential to define accepted accounting practice at a specific time. The highest level of such pr

Calculate operating income under throughput costing, The follow data relate...

The follow data relates ot year 20XX for Plano Manufacturing Company: Units produced - 2,000 Units sold - 1,800 Selling price - $200 / per unit Direct material costs - $80,000 Dire

Realized gain or loss on the exchange, Pauline's Pastry Shop decides to rem...

Pauline's Pastry Shop decides to remodel its offices this year. As part of the remodeling, Pauline's trades furniture with a cost of $12,000 that had been expensed in the year of p

Compute break even assuming direct materials cost, Below find production an...

Below find production and sales information for Herrestad Company. We will use this same company for all the SLPs in this course.  Product information

Compute the cost per unit, Ass ume that during April, the job cost sheet f...

Ass ume that during April, the job cost sheet for Job 206 showed the following:                                                          Dept. A                   Dept. B M

Production needs in inventory for component a, Kenner company produces two ...

Kenner company produces two products: SR200 and TX500. Budged sales for four months are as follows; SR200 TX500 May 8,000 20,000 June 13,000 32,000 July 11,000 39,000 August 18,000

Allocation of scarce resourses, LaNora White received her accounting degree...

LaNora White received her accounting degree in 1992. Since graduating, she has obtained significant experience in a variety of job settings. Her skills include auditing, income and

Direct materials and direct labor:, McDaniel Company manufactures 100-pound...

McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor: Direct Materials (100 lbs. @ $1.00

Share capital of a company, A company has an authorized share capital of 25...

A company has an authorized share capital of 250 million divided into 1,500,000 ordinary shares of sh.100 each and 1,000,000 preference shares of sh.100 each. 1,000,000 ordinary sh

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