Accounting › Section U · Standard costs and variances › Topic U.4
Overhead variances
Overhead is charged to products at standard rates, so at month end the overhead applied rarely equals the overhead actually incurred. Four variances explain the gap: two for variable overhead and two for fixed.
In this topic
- Applying overhead at standard
- Variable overhead spending variance
- Variable overhead efficiency variance
- Worked example: Pellworth's March variable overhead
- Fixed overhead budget variance
- Fixed overhead volume variance
- Worked example: Pellworth's March fixed overhead
- Worked example: a busy month
- The two-variance view
- Common mistakes to avoid
- Key takeaways
This topic is part of Wuanberri Pro. Checking your access…