Total Overhead Variance The total overhead variance is the indifference between the projected overhead balances and the actual overheads incurred during the production process. It includes both, fixed and variable aspects of the production and tends to reveal the overall variance in terms of the deviations between the standardized expenses that were budgeted and the actually incurred at paves way for the management to take corrective measures for the same. Controllable Overhead Variance: The controllable overhead variance is the deviation of budgeted overhead of standard number of units from the actual expenses incurred popularly within the factory overheads. Also, controllable overhead variance is confined to factory overheads irrespective of any in the volume. Through this the unexpected costs may be minimized by keeping the track record of expenses and comparing them with the standard ones. Total overhead variance and controllable overhead variance for the period and classify them as favorable and unfavorable.

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Cariveh Co sells automotive supplies from 25 different locations in one country. Each branch has up to 30 staff working there, although most of the accounting systems are designed and implemented from the company's head office. All accounting systems, apart from petty cash, are computerised, with the internal audit department frequently advising and implementing controls within those systems.Cariveh has an internal audit department of six staff, all of whom have been employed at Cariveh for a minimum of five years and some for as long as 15 years. In the past, the chief internal auditor appoints staff within the internal audit department, although the chief executive officer (CEO) is responsible for appointing the chief internal auditor.The chief internal auditor reports directly to the finance director. The finance director also assists the chief internal auditor in deciding on the scope of work of the internal audit department.You are an audit manager in the internal audit department…

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Chapter 21, Problem 15QS

To determine

Total Overhead Variance

The total overhead variance is the indifference between the projected overhead balances and the actual overheads incurred during the production process. It includes both, fixed and variable aspects of the production and tends to reveal the overall variance in terms of the deviations between the standardized expenses that were budgeted and the actually incurred at paves way for the management to take corrective measures for the same.

Controllable Overhead Variance:

The controllable overhead variance is the deviation of budgeted overhead of standard number of units from the actual expenses incurred popularly within the factory overheads. Also, controllable overhead variance is confined to factory overheads irrespective of any in the volume. Through this the unexpected costs may be minimized by keeping the track record of expenses and comparing them with the standard ones.

Total overhead variance and controllable overhead variance for the period and classify them as favorable and unfavorable.

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