Hi john sir..hope u r best at health.
Plz help with the following question:
When calculating fixed factory overhead volume variance, if actual volume is more than budgeted volume then that is considered favourable variance and the difference between budgeted volume and actual volume is multiplied with FOAR...
Sir money matters for the business. If volume is more then it will cost more as more units will be myltiplied by FOAR..plz clear me this point..
Thanx
Ask the Tutor ACCA MA
Variances
8y ago#1If they produce more, the the fixed overheads per unit will be less and therefore the profit will be more.
I explain this in my free lectures (and also give a 'quick' way of making sure you get the correct favourable or adverse).
The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Thnx
8y ago#3You are welcome :-)
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