Fixed Overhead Capacity variances

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
is it just me or does anyone else have a problem with the capacity variance. I understand the volume variance and the efficiency variance but I have a major problem with capacity variance. I can't distinguish between capacity and volume at the moment. The only way I can work out the capacity variance is to work out the volume varaince and subtract the efficiency variance. I then fiddle about to get workings for the capacity. This is really doing my head in. :?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Fixed Overhead Capacity variances

    Volume measures how many units are produced

    Capacity is one way to increase or decrease the units produced - the time available to maske them

    Efficiency - is the other way - the way the time is used.

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