Introduction Overhead costs are categorized into fixed and variable costs. Both these costs can change depending on several factors. Depending on the costing method in use, the contribution or profit margins can significantly change with variance in either fixed or variable overheads. Under the Marginal costing method, overhead costs are charged directly to the income

Introduction In this article, we will cover in detail about the fixed overhead spending variance. We commonly call The fixed overhead spending variance as fixed overhead expenditure variance or fixed production overhead expenditure variance. Before going further detail, let’s have a look at overview and the basic definition. Business operations require ongoing expenses to produce

Introduction In this article, we will cover in detail for planning and operational variances for materials. We have covered the direct material price variance in previous article. However, in this article, we will go further to planning and operational variances for direct material price as well as planning and operational variances for direct material usage.

Introduction In this article, we will cover in detail of the planning and operational variances for labor. This includes the further breakdown into direct labor rate operational variance, direct labor rate planning variance, direct labor efficiency operational variance and finally direct labor efficiency planning variance. In this article, we will illustrate the detail breakdown of

Introduction In this article, we cover the variable overhead spending variance. This is also called variable production overhead expenditure variance or variable production overhead spending variance. Overhead costs are indirect in nature for product or service and divided into fixed and variables overheads. Variable overheads are linked with products indirectly but change in proportion to