Page 41 - UNISA Manac Cost Course Slides Part 1
P. 41
TEST 3 - COSTING
Absorption costing variances
• Absorbed overhead = Overhead rate x actual units
produced
• Volume variance (Under / over recovery)
• Difference between budgeted and actual production in
terms of volume
= (Actual units – Budgeted units) x Overhead rate
or
= Absorbed overheads – Budgeted overheads
• Expenditure variance
Difference between budget and actual in Rand terms
= Budgeted overheads – Actual overheads
41
