HELP Fixed O/head Variances

te170381 Registered Posts: 26 Regular contributor ⭐
Help please!!!!!
I cannot get my head around the fixed overhead capicity, efficiency e.t.c variances. I am ok with all the other but these are doing my fruit in.

Please can someone explain to me how to remember these, is there an easy way??

I so hate costing!!! It doesn't help that the tutor doesn't care!!!!!!!!!!

PLEASE PLEASE PLEASE HELP. If i can get this ill be fine!!!!!


  • dawn
    dawn Registered Posts: 7 New contributor 🐸

    I tend to remember patterns, so for the Volume, Efficiency and Capacity ....

    Volume : Absorption Rate x (Std hrs Act Output - Budgeted Output)
    Efficiency : Absorption Rate x (Std hrs Act Output - Act hrs Taken)
    Capacity : Absorption Rate x (Act Hrs Taken - Budgeted Output)

    If you look at the patterns, and the positioning of the things in brackets, thats how I remember them.

    eg, Budgeted Output is the last bracket in Volume and Capacity, and St hrs for Actualy Output is the first bracket for Volume and Efficiency then the remaining Act hrs taken fits in the blanks (or end of Efficiency and beginning of Capacity. hmmm its easier to just look at it that try and explain it in writing, but the pattern helps me :)
  • Sully786
    Sully786 Registered Posts: 9 New contributor 🐸
    fixex overhead variances

    thanks for the layout. Its so easy to remeber. Thats the way i have worked fixed overhead variances out. just be carefull about adverse and favourable variances. Make sure you put A or F with each and every Variance you calculate.
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