Lecture 2 Flashcards
Total variable overhead variance
Standard variable overhead to production cost – Actual variable overhead incurred
Variable overhead expenditure variance
BFVO-AVO
=Budgeted variable flexed overhead for direct labour hours-Actual variable overhead
Variable overhead efficiency variance
=(SH-AH) SR
If you have an adverse labour efficiency variance variable over’ed effi will also be adverse.
Fixed overhead expenditure variance
=BFO – AFO
Fixed overhead expenditure variance
Budgeted FOH – Actual FOH
Fixed Overhead volume variance
=(AP-BP)SR
Standard absorption costing
Annual budgeted fixed overheads/Annual budgeted activity
Total fixed overhead variance
= SC-AC
Over-recovery of overheads due to
Actual expenditure different from budgeted expenditure
Actual production different from budgeted production
Fixed overhead expenditure variance
=BFO – AFO
