Fixed Overhead Variances
cs_1988
Registered Posts: 231 Dedicated contributor 🦉
Hi Guys,
Please can someone give me the correct formula's, my book state's two, both give differant answers!!!
Fixed Overhead Expenditure Variance  Differance between Budgeted and Fixed Overeads, the only one i get!!
But can someone please give the formula's to calculate 
Fixed Overhead Volume Variance
Fixed Overhead Capacity Ratio
Fixed Overhead Efficiency Variance
Thanks In Advance
:confused1:
Please can someone give me the correct formula's, my book state's two, both give differant answers!!!
Fixed Overhead Expenditure Variance  Differance between Budgeted and Fixed Overeads, the only one i get!!
But can someone please give the formula's to calculate 
Fixed Overhead Volume Variance
Fixed Overhead Capacity Ratio
Fixed Overhead Efficiency Variance
Thanks In Advance
:confused1:
0
Comments

Hello,
I have write down all three formulas for fixed overhead variances.
Fixed Overhead Volume Variance =
Standard hours/unit for actual production Budgeted hours/unit for production x Overhead absorption rate
Fixed Overhead Capacity Ratio =
Actual hours/unit for actual production  Budgeted hours/unit for production x Overhead absorption rate
Fixed Overhead Efficiency Variance =
Standard hours/unit for actual production  actual hours/unit for actual production x Overhead absorption rate
If you have anymore question in this matter then please do not hesitate to ask.
Best regards
Khurram Taj0 
hey
the FIXED OVERHEAD EXPENDITURE VARIANCE formula is:
BUGETED FIXED OVERHEADS  ACTUAL OVERHEADS and not what you have written.
FIXED OVERHEAD VOLUME VARIANCE:(1)IF OVERHEADS ARE ABSORBED ON UNIT BASIS:
(ACTUAL OUTPUT  BUDGETED OUTPUT) OAR/UNIT
(2)IF OVERHEADS ARE ABSORBED ON HOURLY BASIS FOR EXAMPLE LABOUR OR MACHINE HOUR
(STANDARD HOURS FOR ACTUAL OUTPUT BUDGETED HOURS) OAR/HOUR
FIXED OVERHEAD VOLUME EFFICIENCY VARIANCE:
(STANDARD HOURS FOR ACTUAL OUTPUTACTUAL HOURS) OAR/HOUR
FIXED OVERHEAD VOLUME CAPACITY VARIANCE:
(ACTUAL HOURS BUDEGETED HOURS) OAR/HOUR0 
Cheers Khurram,
Had a chat with my tutor and it appears i have a text book with a mistake in!! But all sorted, thanks for your help!
Chris0 
It is the Osbourne book, but apparently they corrected it, and i got one of the very early versions from 2008! The above formula's are right though!0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 266 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 65 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 194 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership