Basic Accounting Lectures » Cost Accounting

Overhead Variance – Four Variance Method

admin — Sun, 25 Dec 2011 11:33:27 +0000

This is the last lecture on Variance Analysis

In the four Variance method following variances are calculated

Spending Variance
Idle Capacity Variance
Variable Efficiency Variance
Fixed Efficiency Variance.

The spending variance and idle capacity variance are the same as in Three Variance Method. The formula for all of these four variances are given below.

You can click on the image below to enlarge the view.

OH Variance Analysis – Two Variance & Three Variance Method

admin — Mon, 12 Dec 2011 19:18:44 +0000

There are couple of approaches for Overhead Variances. In one approach, variances for FIXED and VARIABLE overheads are calculated separately. (click here for explanation and formula of this approach)

Whereas in the second approach, which is the topic of this post, separate variances are not calculated.

Note: (First approach is more widely used than the later, and you will have to refer your own syllabus in order to determine which approach falls within your scope. In some professional courses, students may be asked to learn both methods.)

In Two Variance Method, the following variances are calculated.

Controllable Variance
Volume Variance

In Three Variance Method, the following variances are calculated.

Spending Variance
Idle Capacity Variance
Efficiency Variance

In Four Variance Method, the following variances are calculated.

Spending Variance
Idle Capacity Variance
Variable Overhead Efficiency Variance
Fixed Overhead Efficiency Variance

The formula for Two Variance Method & Three Variance Method are given are available below in this post whereas the formula for Four Variance Method are shall be provided in the next post.

You can click on the image below to enlarge the view.

Invertory/Stock Levels

admin — Sun, 11 Dec 2011 19:16:49 +0000

What are stock Levels?
Every business has to maintain stocks of material/goods which are used during the production process. Following stock levels are self-explanatory. Like reorder level suggests that at what level we should re order the stock. Similarly maximum or minim stock levels suggest the maximum or minimum stocks to be maintained by the business. Danger level means that if the stock falls below this level, business might be suffering stock out costs i.e. stoppage in production, delayed delivery to client and loss of goodwill etc.

Solving questions on this topic is quite easy if you know the formulas. You will have to remember all these formulas.
Helpful Tip
I am giving you a good tip which will ease the process of remembering these formulas. If you haven’t already noticed, just note it that Requirement and Lead Time are same, i.e. if requirement is average, lead time is also average, if requirement is minimum lead time is also minimum in a formula.

You can click on the image to enlarge the view.

You can click on the image below to enlarge the view.

Overhead variance analysis|Fixed and Variable

admin — Wed, 23 Nov 2011 18:26:33 +0000

In this lecture you will find the formula for the Fixed and Variable Overhead Variances. for labour variances click here & for material variances click here

Fixed Overhead Variances include:

Fixed Overhead Expenditure Variance
Fixed Overhead Volume Variance

Variable Overhead Variances include:

Variable Overhead Expenditure Variance
Variable Overhead Efficiency Variance

You can click on the image below for enlarged view. If you want to download the picture for printing, right click on the image and click ’save image as’ or ’save target as’

Thanks

Video Lecture: Relevant Costing

admin — Thu, 07 Apr 2011 19:56:00 +0000

First of all, thanks to God that I am able to present this lecture.
It took very long time for me to update my site . I tried, but I too busy to upload my new lecture. But now, no need to wait any longer, my new lecture is available for download. Let’s hope that I shall come up with more and more useful lectures soon.

With that said, In current lecture I have explained the features of relevant costing. Download link is given below. Enjoy !!!

Download Link Click here

Store Ledger Card (Lifo Method) Urdu/HIndi

admin — Fri, 02 Apr 2010 13:21:50 +0000

In this video lecture you would learn how to draw store ledger card in an easy to understand way.

Video Length:

Language: Urdu/Hindi

Downloadable: Yes

I am waiting for your comments and replies

Download Video

If you face any problem downloading OR playing the video, submit the comment.

Variance Analysis Practice Question

admin — Mon, 21 Dec 2009 15:31:43 +0000

This is the First and very basic question on Variance Analysis

Try this. Answer to this has been published Now.

This answer will be followed by a video tutorial.

thanks, waiting for your comments

thanks

Answer

Variance analysis video lecture in Urdu (Material)

admin — Fri, 18 Dec 2009 12:08:59 +0000

This is the second lecture on the Variance analysis.
In this lecture labour variances have been discussed.
Language: Urdu/(if you know Hindi, you can also understand that).
Lecture in English will be Posted soon (IA).

If you face any difficulty in viewing this, you can comment below.

Variance Analysis (Material) Video Lecture In Urdu

admin — Fri, 11 Dec 2009 07:46:32 +0000

This is the first lecture on Variance analysis.
In this lecture Material variances have been discussed.
Language: Urdu/(if you know Hindi, you can also understand that).
Lecture in English will be Posted soon (IA).

If you face any difficulty in viewing this, you can comment below.

Thanks for watching.

Factory overhead Problems, Practice Questions, MCQs

admin — Sun, 06 Dec 2009 12:05:08 +0000

Title: Factory Overhead (cost accounting)

Type: True False

Number of questions: 10 (version 1)

Minimum percentage to Pass test: 70%

Time limit for each question: Yes (20 seconds)

Each True/False carry: 5 marks.

Downloadable: Yes

Download This