Actual FOH

Applied FOH

Over applied /under applied

Comparing between actual and estimated

Variance = Actaul FOH - Applied FOH

Actual FOH - Budgeted Allowance based on Ca
+ Budgeted Allowance based on Capacity utilis
Spending Varaince + Idle Capacity Variacne

Spending Variance = Actual FOH - Budgeted Allowance based on Capacit

Idle Capacity Variance = + Budgeted Allowance based on Capacity utilised -

Rent
Unit produce

Cost per unit

timated Variance Analysis
Materail
Labour
FOH

NEPRA
lied FOH
nce based on Capacity utilised Cost Increase Spending Variance
on Capacity utilised - Applied FOH Capacity Idle Capacity Variance
Variacne

based on Capacity utilised

Capacity utilised - Applied FOH

100000 100000 100000

50000 40000 60000

2 2.5 1.67
ng Variance
pacity Variance
Normal Annaul capacity for a company is 60,000

Fixed FOH for m/o Oct

Variable FOH

Actual FOH in m/o October

Actual Output in m/o Oct

Applied FOH= Applied FOH Rate * Actual capaci

Applied FOH= ?? * 4800 units
Applied FOH= 3 * 5100 units
Applied FOH= 15300

Estimated FOH based on Normal Capacity:

Fixed FOH (2500*12)

Variable FOH (2.5*60000)
Total FOH if normal capacity is used

Applied FOH Rate (180,000/60,000)

Budgeted Allowance based on Capacity utilised

Fixed FOH 2500

Variable FOH (2.5 * 5100) 12750
Total 15250
any is 60,000 units. 5,000 unit monthly

2500
$ 2.5/unit

15500
5100 unit
Unfav
ctual capacity Utilised Fav

pacity:

30000
150000
180000

$ 3 per Unit
city utilised
0 unit monthly

Actual FOH 15500

Budgeted Allowance based on
Capacity utilised 15250
Applied FOH 15300

Spending Var 250

Idle Capacity Var -50
Normal Capacity
Applied FOH Rate based on Normal Capacity
On Normal capacity, Fixed FOH is 144,000.

Actual FOH
Acutal Capacity worked
 90000 hours
apacity $4 per hours

376,000
88000 hours