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Meanings of variance

Category: Term

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Created by: KayeDavis

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Term	Definition
FIXED OVERHEAD EXPENDITURE VARIANCE	Differences due to cost Actual overheads may be different to budgeted overheads.
Materials usage variance	How much of the variance is due to us using a different amount of material to what we had budgeted.
Fixed overhead efficiency variance	For example, our overheads may have been absorbed on a labour hour basis. But what if our labour is really efficient and making things more quickly? We will absorb less overheads. This variance will measure it
FIXED OVERHEAD VOLUME VARIANCE	Differences in production levels. If our absorption activity rate (units/machine hours/ labour hours) is different to budget, we will have absorbed a different amount of overhead.
Fixed overhead capacity variance	We might be able to get more out of our resource. For example, staff may work overtime, or machine may run for longer. Therefore they are able to produce more. Or, they may have been operating for less and therefore unable to produce as much.
Labour efficiency variance	How much of the variance is due to us using a different amount of labour per unit to what we had budgeted.
Idle time variance	Compare the total labour hours paid for With The productive labour hours
Materials price variance	How much of the variance is because we the price per kg/litre was different to what we had budgeted.
Labour rate variance	How much of the variance is because we the paid a different labour rate per hour to what we had budgeted

EXPENDITURE	FIXED OVERHEAD _____ VARIANCE	1	0	true
variance	How much of the _____ is due to us using a different amount of material to what we had budgeted.	2	1	true
efficiency	Fixed overhead _____ variance	3	0	true
levels	Differences in production _____. If our absorption activity rate (units/machine hours/ labour hours) is different to budget, we will have absorbed a different amount of overhead.	4	1	true
overtime	We might be able to get more out of our resource. For example, staff may work _____, or machine may run for longer. Therefore they are able to produce more. Or, they may have been operating for less and therefore unable to produce as much.	5	1	true
different	How much of the variance is due to us using a _____ amount of labour per unit to what we had budgeted.	6	1	true
productive	Compare the total labour hours paid for With The _____ labour hours	7	1	true
budgeted	How much of the variance is because we the price per kg/litre was different to what we had _____.	8	1	true