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Overhead Variance Analysis Techniques

The document discusses different types of overhead variances in accounting. It presents a four-way and three-way format for analyzing overhead variances, breaking them down into spending, efficiency, and volume variances. It also differentiates between controllable and non-controllable variances, with spending and efficiency variances usually being controllable and volume variances usually being non-controllable.

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Abi Serrano Taguiam
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5 views2 pages

Overhead Variance Analysis Techniques

The document discusses different types of overhead variances in accounting. It presents a four-way and three-way format for analyzing overhead variances, breaking them down into spending, efficiency, and volume variances. It also differentiates between controllable and non-controllable variances, with spending and efficiency variances usually being controllable and volume variances usually being non-controllable.

Uploaded by

Abi Serrano Taguiam
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

OVERHEAD VARIANCE

four-way AP x AQ= Actual VOH VOH Spending Variance SP x AQ= Budgeted VOH VOH Efficiency Variance SP x SQ= Standard VOH

three-way

two-way

Spending Variance Efficiency Varinace

Controllable Variance

Total OH Actual FxOH FxOH Spending Variance Budgeted FxOH Volume Variance SP x SQ= Standard FxOH Volume Variance Non-controllable Variance Variance

ALTERNATIVE APPROACH four-way AFOH OH Spending Variance BAAH OH Efficiency Variance BASH Volume Variance SFOH Volume(Non-controllable) Variance Budget(Controllable) Variance Total OH Variance three-way two-way

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