Calculate the variable overhead spending and efficiency variances. (Round answers to O decimal places, e.g. 125. If varlance is zero, select "Not Applicable" and enter O for the amounts.) Variable overhead spending variance Variable overhead efficiency variance $ $
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Variable Overhead Spending Variance = (Actual Hours x Standard Rate) - Actual Overhead Costs
Variable Overhead Efficiency Variance = (Standard Hours for Actual Production - Actual Hours) x Standard Rate
Standard Hours for Actual Production = Actual Production x Standard Hour per Package Produced
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