25 24 Summary of Overbead Expenditure for February (Budgeted and Actual) Budgeted Actual Overhead expenditure +4,00,000 34,10,000 Working days Production 25,000 23,000 Overhead recovery rate = 16 per unit = 348,00,000/3,00,000 units Total overhead variance (Actual overhead cost incurred - Standard overhead charged to production) 34,10,000 - 23,000 X 316) - 342,000 (adverse) Budget variance (Actual overhead cost - Budgeted overhead costs) = 34,10,000 - 34,00,000 = $10,000 (adverse) 361 Volume variance (Budgeted output - Actual output) X SOR per unit = (25,000 - 23,000) 316 = 332,000 (adverse) Volume variance has two components: Efficiency variance: [(Budgeted output per day * Actual working days) - Actual output) X SOR per unit (1,000 X 24 = 24,000 - 23,000) X 816 = 316,000 (adverse) Calendar variance: (Number of scheduled working days - Actual working days) X SOR per day (25 - 24 X 16,000 = 16,000 (adverse) P.19.21 Eastern Manufacturers Ltd operates a standard costing system. In connection with the weekly cost report for the process X, you have been informed that: 1. The standard costs per hour of the process, based on a normal week of 40 hours work, are: Wages 90 Variable expenses 25 Fixed expenses 240 Standard output in units per hour, 20. 2. The following information has been recorded in respect of the process for one week: Hours worked 36 Non-productive hours (awaiting work) 4 Total hours paid for 40 Output (units) Actual wages paid 33,700 Actual variable expenses 1,200 Actual fixed expenses 5,000 You are required to compute the variances relating to process X for the week. 125 850