Variable Overhead Expenditure Variance Formula

Variable Overhead Expenditure Variance Formula

Variable overhead Expenditure variance can be calculated by the following simple formula. Variable overhead expenditure variance can be favorable or adverse.

Actual Variable Overhead – (Actual Hr x Standard Rate per Hr)

Example

Actual Expenditure 100,000

Actual Hr 25,000

Standard Rate $ 5

Solution

Actual Variable Overhead – (Actual Hr x Standard Rate per Hr)

= 100,000 – (25,000 x 5)

= 100,000- 125,000

=-25,000