Scribd Logo
Upload

Welcome to Scribd!

  • ACC20007 Week 9 Lecture Examples

    Uploaded by

    Ming Kai
    15 views5 pages
    The document discusses the calculation of four types of variances: variable overhead spending variance, variable overhead efficiency variance, fixed overhead budget variance, and fixed overhead volume variance. It provides the formulas to calculate each variance and works through two examples, with actual figures for a company resulting in both favorable and unfavorable variances. Standard hours are calculated based on actual output and standard hours per unit. Budgeted fixed overhead is determined by subtracting budgeted variable overhead from total budgeted overhead.

    Original Description:

    Management accounting lecture slides

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses the calculation of four types of variances: variable overhead spending variance, variable overhead efficiency variance, fixed overhead budget variance, and fixed overhead volume variance. It provides the formulas to calculate each variance and works through two examples, with actual figures for a company resulting in both favorable and unfavorable variances. Standard hours are calculated based on actual output and standard hours per unit. Budgeted fixed overhead is determined by subtracting budgeted variable overhead from total budgeted overhead.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    15 views5 pages

    ACC20007 Week 9 Lecture Examples

    Uploaded by

    Ming Kai
    The document discusses the calculation of four types of variances: variable overhead spending variance, variable overhead efficiency variance, fixed overhead budget variance, and fixed overhead volume variance. It provides the formulas to calculate each variance and works through two examples, with actual figures for a company resulting in both favorable and unfavorable variances. Standard hours are calculated based on actual output and standard hours per unit. Budgeted fixed overhead is determined by subtracting budgeted variable overhead from total budgeted overhead.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    1.

    a Variable Overhead Spending Variance = Actual Variable Overhead - (AH*SVR)


    Variable Overhead Spending Variance = $1701000 - (764000*$2)
    Variable Overhead Spending Variance = $173000 Unfavourable

    1.b Variable Overhead Efficiency Variance = (AH*SVR) - (SH*SVR) SH = Actual Output*Standar


    Variable Overhead Efficiency Variance = (764000*$2) - (750000*$2) SH = 250000*(6 per unit/2 p
    Variable Overhead Efficiency Variance = $28000 Unfavourable SH = 750000

    1.c Fixed Overhead Budget Variance = Actual Fixed Overhead - Budgeted Fixed Overhead
    Fixed Overhead Budget Variance = $392000-$400000^
    Fixed Overhead Budget Variance = $-8000 Favourable

    ^Budgeted Fixed Overhead = Budgeted Overhead - Budgeted Variable Overhead


    ^Budgeted Fixed Overhead = $2000000 - (800000*$2)
    ^Budgeted Fixed Overhead = $400000

    1.d Fixed Overhead Volume Variance = Budgeted Fixed Overhead - Applied Fixed Overhead
    Fixed Overhead Volume Variance = $400000 - (750000*X$0.50^)
    Fixed Overhead Volume Variance = $25000 Unfavourable

    *Standard Allowed Hours = 250000 Units*3 Hours per Unit


    ^Predetermined Overhead Rate = $400000/800000 Budgeted Machine Hours

    3 Variable Overhead Spending Variance = Actual Variable Overhead - (AH*SVR)


    Variable Overhead Spending Variance = $1701000 - (764000*$3)
    Variable Overhead Spending Variance = $-591000 Favourable

    Variable Overhead Efficiency Variance = (AH*SVR) - (SH*SVR) SH = Actual Output*Standar


    Variable Overhead Efficiency Variance = (764000*$3) - (750000*$3) SH = 250000*(9 per unit/3 p
    Variable Overhead Efficiency Variance = $42000 Unfavourable SH = 750000

    Fixed Overhead Budget Variance = Actual Fixed Overhead - Budgeted Fixed Overhead
    Fixed Overhead Budget Variance = $392000-$400000^
    Fixed Overhead Budget Variance = $-8000 Favourable

    ^Budgeted Fixed Overhead = Budgeted Overhead - Budgeted Variable Overhead


    ^Budgeted Fixed Overhead = $2800000 - (800000*$3)
    ^Budgeted Fixed Overhead = $400000

    Fixed Overhead Volume Variance = Budgeted Fixed Overhead - Applied Fixed Overhead
    Fixed Overhead Volume Variance = $400000 - (750000*X$0.50^)
    Fixed Overhead Volume Variance = $25000 Unfavourable

    *Standard Allowed Hours = 250000 Units*3 Hours per Unit


    ^Predetermined Overhead Rate = $400000/800000 Budgeted Machine Hours
    )

    SH = Actual Output*Standard Hours Per Unit


    SH = 250000*(6 per unit/2 per machine hour)
    SH = 750000

    verhead

    Overhead

    SH = Actual Output*Standard Hours Per Unit


    SH = 250000*(9 per unit/3 per machine hour)
    SH = 750000

    verhead

    Overhead

    You might also like