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

Demerits of break even point, DEMERITS OF BREAK EVEN POINT 1. It pays n...

DEMERITS OF BREAK EVEN POINT 1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc 2. Fixed cost, enti

Direct and indirect costs, Direct and Indirect costs Recall such direc...

Direct and Indirect costs Recall such direct costs are costs which can be traced particularly to the end product of the production procedure while indirect costs cannot be so

Wages and salaries, Given the information that follows, prepare a cash budg...

Given the information that follows, prepare a cash budget for the XYZ Store for the first six months of 2010. All prices and costs remain constant. Sales are 90% for cre

Determine cash flow statement, Download the financials of Shoprite , study ...

Download the financials of Shoprite , study them, then, using ratio analysis, the cash flow statement, and the segmental breakdown of the results, prepare a statement outlining the

What was the cost of raw materials, Raw Materials: Manufacturing Overhead B...

Raw Materials: Manufacturing Overhead Bal 1/1: 36,000 Credits: ? Debits: 383,000 Credits: ? Debits: 470,000 Bal: 12/3: 156,000 Work in Process: Bal 1/1: 73,000 Credits: 770,000

Overhead anaylysis, the annual overhead costs for abc ltd which has 3 produ...

the annual overhead costs for abc ltd which has 3 production centeres and 2 service centers are as follows. indirect wages & supervision X 2million Y 2million 3 production departme

Assignment of variance in variance calculation, Assignment of Variance in V...

Assignment of Variance in Variance Calculation In variances calculating, the calculations require to be detailed sufficient hence the responsibility for the variance can be a

Determining working capital requirements, Understanding the existing capita...

Understanding the existing capital requirements and how these are financed will assist us in understanding the process of financing of business and the flow of funds inside the bus

Calculate manufacturing overhead for the year, Baka Corporation applies man...

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on t

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