Basic Accounting Lectures

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.

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.

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

This is the First and very basic question on Variance Analysis

Try this. Answer to this has been published Now.

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.

There are two types of variances in case of labour.

1) Wage Rate Variance

If the variance is occuring due to the difference in wage rates (Actual v.s Standard), then it shall be called wage rate variance.

2) Labour Efficiency Variance

Efficiency relates to the labour hours. Let us suppose that we

In this lecture formula for Material Variances are given. You can print them. These formula have been simplified, and are easy to remember. If you have any question or complaint, feel free to comment below.You can download this Tutorial by right clicking on the picture and save target as. You can click on the image [...]