| OVERHEAD VARIANCE is The DIFFERENCE between the Actual Overhead Incurred and the amount of overhead absorbed to production through the use of a standard overhead rate.
– For the VARIABLE overhead, the standard rate is computed by taking the budgeted variable overhead of the period divided by the budgeted volume for the period. – For the FIXED overhead, the standard rate is computed by taking the budgeted fixed overhead of the period divided by the budgeted volume for the period. |