Budgeted/Standard/ overheads

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
I would appreciate any guidance on remembering the difference between budgeted production overheads and standard/actual fixed overhead absorbed. Basically any help on overheads! I seem to have a mental block.

Rubio :?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Budgeted/Standard/ overheads

    There is a brilliant way of learning the variances on the MSN AAT forum known as PURE AS - worth a look, I have found it really helpful
    http://groups.msn.com/AATTechnician/general.msnw?action=get_message&mview=0&ID_Message=347&LastModified=4675564071810667295

    best of luck
    Eva :lol:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Budgeted/Standard/ overheads

    The budgeted overheads would have been worked out (as you did at intermediate level). From our point of view in terms of control these overheads are made up of
      BUDGETED UNITS which when multiplied by
        standard hours per unit
        =the budgeted total hours, which when you multiply by
        the overhead absorption rate per hour, will give you
        the total budgeted overhead cost

      The standard overhead cost of actual production has a remarkably similar sequence
        ACTUAL UNITS produced which when multiplied by
          standard hours per unit
          =the total standard hours, which when you multiply by
          the overhead absorption rate per hour, will give you
          the total standard overhead cost of what we
        actually produced

        The only other costs you would need to calculate would be
          Standard cost of the actual hours worked
          the actual total overhead incurred
      • System
        System Posts: 100,534 🤖 Admin 🤖
        Re:Budgeted/Standard/ overheads

        Hi Eva,

        Thanks for that.

        Rubio
      • System
        System Posts: 100,534 🤖 Admin 🤖
        Re:Budgeted/Standard/ overheads

        Hi Sandy

        The old brains gets blocked every now and again. Thanks for the help, that seems to have jogged the memory.

        Rubio :)

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