Varaince Analalysis Favourable or Adverse

System · April 2005

Does anyone have a good way of remembering whether or not the Fixed Overhead Efficency and Capacity Variances are Adverse or Favourable? Thanks

System · April 2005

Varaince Analalysis Favourable or Adverse

Hi The result will tell you if Favourable or Adverse. The way I remember it is they all make sense apart from Fixed OH Volume capacity. Eg. Fixed OH volume efficiency: Budgeted Hours 10,200 Actual Hours 8,500 Result 1,700 (Favourable as less hours worked) Fixed OH volume capacity:** Budgeted Hours 10,200 Actual Hours 8,500 Result 1,700 (Adverse) ** Always remember that capacity is different to the rest! Hope this is what you were referring to.

System · April 2005

Varaince Analalysis Favourable or Adverse

Hi. As the efficiency and capacity are sub-variances, the only way i've found is to make sure they equal the volume variance. Scott.

System · April 2005

Varaince Analalysis Favourable or Adverse

Are you sure about this?

System · April 2005

Varaince Analalysis Favourable or Adverse

Is who sure about what? Scott.

System · April 2005

Varaince Analalysis Favourable or Adverse

is ghoban sure about efficiency. I don't recall budget hours as part of this calculation. This site makes it difficult to tell who is replying to whom, occasionally.

System · May 2005

I hope you find this helpful

If more hours were worked than budgeted the capacity is Favourable If more hours were worked than the standard neeeded for actual output the efficiency variance is Adverse So we have more capacity if the hours are more than budget But we have less efficiency if the time taken was more than the standard for actual output

System · May 2005

Varaince Analalysis Favourable or Adverse

Bryan I agree Ghoban: efficiency is the difference between the standard time for actual production less actual time taken

Varaince Analalysis Favourable or Adverse

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