Section 5: Overhead Variances

Question 1

Overhead EFFICIENCY Variance

Answer 1

(Std Hours Allowed - Actual Hours Worked) * Std. Variable O/H Rate

Question 2

Overhead VOLUME Variance

Answer 2

(Std. Fixed O/H Rate * Actual Production) - Budgeted Fixed O/H

Question 3

Overhead SPENDING Variance

Answer 3

(Std Variable O/H Rate - Act. Variable O/H Rate) * Actual Hours