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
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