Management Advisory Services

S TA N D A R D C O S TIN G
 STAN D ARD S AN D BU D G ETS

Total Budgeted Cost

= Budgeted Production x Standard Cost
per unit

Total Standard Cost

= Actual Production x Standard Cost
per unit
TO TAL FO H Variances
Com putation
Actual FOH
Less: Standard FOH
Total FOH Variance
Variable FO H Variances Com putation

Actual variable FOH

Less: Standard variable FOH
Variable OH Variance
Fixed FO H Variances Com putation

Actual fixed FOH

Less: Standard fixed FOH
Fixed OH Variance
 2-w ay Analysis Con Vo Analysis
Controllable Variance
Actual FOH xxx
Less: Budgeted Allowance on Standard Hours
Fixed (Time x Rate) xx
Variable (Time x Rate) xx XXX XXX
Volume Variance
Budgeted Allowance on Standard hours
xxx
Less: Standard FOH xxx xxx
Total Overhead Variance xxx
 3-w ay Analysis SVV Analysis
Spending Variance
Actual FOH xxx
Less: Budgeted Allowance on Actual Hours
Fixed (Time x Rate) xx
Variable (Time x Rate) xx XXX XXX
Variable Efficiency Variance
Budgeted Allowance on Actual hours xxx
Less: Budgeted Allow. on Standard hours xxx xxx
Volume Variance
Budgeted Allowance on Standard hours xxx
Less: Standard FOH xxx xxx
Total Overhead Variance xxx
 4-w ay Analysis FVVVo Analysis
Fixed Spending Variance
Actual Fixed OH xxx
Less: Budgeted Fixed OH xxx xxx
Variable Spending Variance
Actual Variable OH xxx
Less: (Actual hours x Variable OH rate) xxx
xxx
Variable Efficiency Variance
Budgeted Allowance on Actual hours xxx
Less: Budgeted Allow. on Standard hours xxx
xxx
Volume Variance
Budgeted Allowance on Standard hours xxx
Less: Standard FOH xxx xxx
Total Overhead Variance xxx
 5-w ay Analysis FFVVC Analysis
Fixed Spending Variance
Actual Fixed OH xxx
Less: Budgeted Fixed OH xxx xxx
Variable Spending Variance
Actual Variable OH xxx
Less: (Actual hours x Variable OH rate) xxx
xxx
Variable Efficiency Variance
Budgeted Allowance on Actual hours xxx
Less: Budgeted Allow. on Standard hours xxx
xxx
Capacity Variance
Budgeted Allowance on Actual hours xxx
Less: (Actual hours x Standard OH rate) xxx
xxx
Fixed Efficiency Variance
Change in hours x Fixed OH rate xxx xxx
Sum m ary ofO verhead Variances
2-way 3-way
Analysis Analysis

4-way
Analysis
5-way
Analysis
Sum m ary ofO verhead Variances

Variable
OH
variances

Fixed OH
variances
 G anern Corporation contains the follow ing overhead costs,
com puted based on a m onthly norm alvolum e of25,000 or
50,000 directlabor hours:
Variable FO H P12/unit
Fixed FO H P 8/unit
Total P20/unit
The follow ing inform ation pertains to the m onth ofApril2013:
ActualVariable O H P316,680
ActualFixed O H 225,000
ActualProduction 26,000 units
ActualD L hrs w orked 54,600 hours

D eterm ine the follow ing:

1. Variable overhead variance
2. Controllable Variance
3. Fixed Efficiency Variance
Sum m ary ofO verhead Variances
Com putation:

1)
Actualvariable FO H P326,680
Less Standard Variable FO H 312,000
Variable O verhead variance 4,680 U
Com putation:

2)
ActualFO H (316,680+ 225,000) P541,680
Less Budget Allow ance based on
Standard hours:
budgeted fi
xed overhead P200T
budgeted variable overhead 312T 512,000
Controllable Variance P29,680 U
Ediw aw !