1. Variable Overhead Expenditure Variance
= Actual V.O.H – V.O.H.A.R x Actual labour hour
= Shs 10300 – shs 8 (1200)
= Shs 10300 – Shs 9600
= Sh. 700 A
2. Variable Overhead Efficiency Variance
= V.O.H.A.R (Actual hours – Standard hours)
= Shs 8 (1200 - 1100)
= Shs 8 (100) – shs 800 A
Note: Standard hours = Standard hours per unit x units produced
= 5 x 220 = 1100
Variable overhead cost = Variable overhead expenditure variance + Variable overhead Efficiency variance.
= Shs 700 A + Shs 800 A
= Shs 1500 A
Wilfykil answered the question on August 7, 2019 at 05:38
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