Steps:
1. Choose the period
2. Select cost allocation bases to use in allocating variable overhead costs to input
3. Indentify the variable overhead costs associated with each cost-allocation base
4. Calculate the rate per unit of each cost-allocation base used to allocate variable OHDS to Output produced
- Budgeted Variable OHD Rate = Budgeted input allowed per output UNIT x Budgeted variable overhead cost rate per input unit.
Fixed OHD Flexible Budget Variance VOHD Budget Variance (AND Flexi-budget variance)
FOHD Budget Variance = ACTUAL COSTS INCURRED - STATIC BUDGET AMOUNT
Fixed OHD PRODUCTION-VOLUME VARIANCE
FOHDEV = BUDGETED FIXED OVERHEAD - FOHD ALLOCATED USING FLEXI RATE FOR ACTUAL OUTPUT
FIXED OVERHEAD OVER/UNDER APPLIED - ACTUAL FIXED OVERHEAD - FOHD ALLOCATED USING FLEXI RATE FOR ACTUAL OUTPUT
Attachment:- Indentify the variable overhead costs.pdf