Pev dec 2007

nosaj

TASK 1.1 B iV FIXED OVERHEAD CAPACITY VARIENCE

CAN SOMEONE PLEASE ASSIST ME IN CALCULATING THE CAPACITY VARIANCE, I AM GETTING CONFUSED. THANKS FOR HELP

SandyHood

(Actual hours worked - Budgeted hours) x OAR per hour

Actual hours worked = 1,800 hours

Budgeted hours = 80,000 boxes x 0.02 hours per box = 1,600 hours

Actual hours - Budgeted hours = 200 more hours worked than budgeted (more capacity to produce)

Capacity variance: 200 hours x £50.00 per hour = £10,000 favourable

nosaj

thanks again Sandy I know the formula but could not seems to find the budgeted hours