What is the difference between Capacity Variance and Efficiency Variance?

They both seem to be:

Actual Hours x SR
- Standard Hours x SR


???

Answers

  • georgeSO
    georgeSO AAT Student Posts: 9
    Capacity variance is the difference between unflexed budget and Actual Hrs x SR

    Whereas efficiency variance is the difference between Actual Hrs x SR and Standard Hrs for Actual production x SR

    Hope this makes sense.
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