|
It is the difference between standard variable overheads
for actual output (or recovered variable overheads) and actual
variable overheads.
VOCV = Recovered Variable Overheads – Actual Variable
Overheads
Causes of Variance: This variance may be due to advance
payment of expenses, or outstanding expense or payment of
past outstanding expenses during this period, or on account
of certain abnormal expenses incurred such as, repairs of
machinery due to breakdown, expenses due to spoilage or defective
workmanship or excessive overtime work, etc.
It is the difference between standard fixed overheads for
actual output (or recovered overheads) and actual fixed overheads.
FOCV = Recovered Fixed Overheads – Actual Fixed Overheads
Causes of Variance: Difference between actual and
recovered fixed overheads may be on account
- A higher or lower amount of fixed overheads, compared
to budgeted fixed overheads, might have been incurred for
the same production during the same period.
- The same amount of fixed overheads might have been incurred
for a higher or lower production that the budgeted production
during the same period.
|
Accounts
Home Page
