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How is working more hours than we budgeted a favourable fixed overhead capacity variance and working less hours an adverse variance?
We assume that it is budgeted labour hours that limit the budgeted production, and therefore having more hours available than budgeted means we can produce more units and make more profit, which is favourable.
I do explain this in my free lectures – the lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Am having my exam in less than two weeks and from now on daily I will watch the lectures carefully..
Thank you Sir…
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