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Hi there,
For variable overhead expenditure variance, I understand that the following are compared:
Actual Hours x Actual Rate
vs
Actual Hours x Standard Rate
May I check if the “Actual Hours” should be the actual hours worked, or should it be actual hours paid (ignoring any idle time)?
Thank you.
We use the actual hours worked on the assumption that overheads are only incurring during hours worked (not during idle hours).
Please do watch my free lectures because I explain this point in the lectures.
The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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