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Finanical Performance Practice Paper 2 task 1.3a

AATnoviceAATnovice Feels At HomeRegistered Posts: 46
can somebody tell me the formula of how to work out the fixed overhead efficiency?

can anybody tell me a easy way to work out the;
Fixed over head capacity
Fixed overhead expenditure
Fixed overhead efficiency

Many Thanks in Advance

Comments

  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Do you use the formula
    (Standard labour hours produced - Actual labour hours worked) x standard labour rate per hour = Labour efficiency variance?

    If so, then
    (Standard labour hours produced - Actual labour hours worked) x standard overhead absorption rate per labour hour = Fixed overhead efficiency variance

    If not, please state the labour effiency variance formula that you use.
    Sandy
    [email protected]
    www.sandyhood.com
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    can anybody tell me a easy way to work out the;
    Fixed over head capacity
    Fixed overhead expenditure
    Fixed overhead efficiency

    Not quote the answer to your question but hopefully these 2 points help.
    Remember:
    If more labour hours are actually worked than budgeted, then the business has the capacity to produce more and fixed overhead capacity must be favourable.

    If the actual fixed overhead cost is more than budgeted fixed overhead expenditure must be adverse.
    Sandy
    [email protected]
    www.sandyhood.com
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    I hope this helps with the first question on 1.3

    I hope this helps with the first question on 1.3
    Attachment not found.
    Sandy
    [email protected]
    www.sandyhood.com
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