Concept explainers
Concept introduction:
Fixed
The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows:
Fixed Overhead Volume variance:
The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost the formula to calculate the Fixed Overhead volume Variance is as follows:
Note: The allocated fixed overhead is calculated with the help of following formula:
To indicate:
The Journal entry for Fixed Overhead Cost and related variances.
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