Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
Fixed overhead budgeted variance is the difference between estimated budgeted cost and actual fixed overhead cost of production.
Budgeted variance analysis is very helpful in controlling the cost and expenditure of products and also helpful in determining the variation in the production expenditure with budgeted expenditure and help to eliminate variances in future and make better budgets.
Incurring higher fixed costs than were planned for in the budget can cause adverse overhead capacity variance. Other caused can include planning errors, inefficient management of fixed overheads, and business expansion that was not added to the budget.
Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.
volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.
Combined overhead variance = fixed overhead variance + variable overhead varianceFixed Overhead :which remains fixed and donot change upto certain level of productionVariable Overhead: which keep changing with the change in production units.
Fixed manufacturing overhead budget variance is?
a
A favorable variance is the difference between the budgeted or standard cost and the actual cost. If the actual cost is less than budgeted or standard cost, it is a favorable variance.
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
Fixed overhead budgeted variance is the difference between estimated budgeted cost and actual fixed overhead cost of production.
Variable overhead cost variance is that variance which is in variable overheads costs between the standard cost and the actual variable cost WHILE fixed overheads cost variance is variance between standard fixed overhead cost and actual fixed overhead cost.
There is a variance.
Difference between actual overhead and applied overhead is as follows: Difference = 33451 - 32000 = 1450 Difference of variance will be charged to income statement.
A favorable direct materials efficiency variance indicates that you are using less material in production than was budgeted for.