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Pertemuan 5

Flexible Budgets and


Overhead Analysis
Pengertian

Flexible Budget atau Anggaran Variabel


Adalah anggaran yang di desain untuk
mencakup jangkauan aktivitas yang
digunakan untuk mengembangkan biaya
yang dianggarkan pada titik manapun
dalam rentang aktivitas tersebut untuk
dibandingkan dengan biaya
sesungguhnya pada suatu perusahaan.

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Definisi lain menyatakan :
Flexible budget adalah anggaran yg
dapat disesuaikan dengan berbagai
tingkat aktivitas guna mncerminkan
bagaimana biaya-biaya berubah seiring
dengan perubahan volume produksi.

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Flexible budget berbeda denga anggaran
Statis. Anggaran statis adalah anggaran yang
dibuat untuk satu tingkat kegiatan (one level of
activity) selama jangka waktu tertentu.
Contohnya persentase dari kapasitas, jumlah
produk yang dihasilkan selama jangka waktu
tertentu, jumlah jam yang dikerjakan dan
lainnya.

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Perbedaan Anggaran Statis dengan
Anggaran Fleksibel
a. Flexible Budget tidak membatasi diri hanya
pada satu tingkat aktivitas, tetapi pada
beberapa tingkat kisaran aktivitas (range
activity atau relevant activity).
b. Static Budget diarahkan pada satu tingkat
saja.

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b. Dalam pendekatan Flexible Budget
hasil dari actual tidak harus
dibandingkan biaya yang dibudgetkan
pada tingkat budget aktivitas semula,
pada static budget harus dibandingkan

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c. Flexible Budget bersifat dinamik ,.
Static budget bersifat statis.
d. Pada Flexible Budget terdapat under
or over applied, dan static budget
istilah ini tidak ada.

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2. Karaktetristik Flexible Budget
1) . Ditujukan ke arah tingkat kapasitas
keseluruhan yang berada dalam range relevan
atau relevant range dari pada tingkat aktivitas
tertentu dan hanya ditujukan kearah satu tingkat
aktivitas (Denomonitory Activity). Denominator
Activitry adalah angka yang ditentukan dalam
flexible budget yang dapat digunakan untuk
menentukan jumlah total biaya overhead pabrik
pada tingkat aktivitas tertentu dari relevant range.

Tarif biaya overhead overhead pabrik ditentukan


dimuka =
BIaya FOH Flexible budget/Denominator activity.

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2).Bersifat dinamis dari anggaran
statis, karena flexible budget
dapat disesuaikan dengan tingkat
aktivitas apa pun yang berada
dalam relevant range/activity,
sekalipun periode sudah berlalu.

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3). Dalam masalah perhitungan
Overhead (non manufaktur) dan
Factory Overhead (Manufaktur)
terdapat 4 faktor yang dapat di
analisis dalam flexible budget
yaitu :

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(1) FOH ( Pabrik dan Non pabrik ) umumnya
terdiri dari atas biaya yang banyak
terpisah satu sama lainnya
(2) Biaya yang terpisah ini kerap sangat kecil
nilai $/rupiahnya sehingga menyulitkan
untuk mengendalikannya dengan cara
yang sama dengan pengendalian
Direct Material Cost dan Direct Labor
Cost.
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(3). Biaya yg terpisah lainnya kecil ini sering
kali merupakan tanggung jawab atau
pusat pertanggung jawaban dari manajer
yang saling berbeda pada segemen yang
berbeda pula .
(4). Biaya FOH ( khusus pabrik) berbeda
perilaku biayanya , variabel, tetap dan
semi variabel.

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Tahap-tahap Penyusunan
Flexible budget
.
1. Menentukan kisaran relevan atas aktivitas yg
diharapkan berfluktuasi masa periode yang
akan datang.
2. Menganalisis biaya pada relevant range
dalam elemen variabel,tetap dan semi
variabel..
3. Memisahkan biaya berdasarkan perilakunya
dan menetupan tarif untuk biaya, tetap ,
variabel dan semi variabel

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4. Menggunakan tarif untuk bagian variabel dari
biaya, menyusun sebagai budget yg
memperlihatkan biaya-biaya apa yg akan
dikeluarkan pada berbagai titik operasi
pada semua relevant range.
5.Melakukan analisis Varians khusus Overhead
dan Factory Overhead atas Biaya Variabel
dan Biaya Variabel untuk mengukur kinerja
perusahaan .

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Ada 4 varians dalam Flexible
Budget yaitu:

1 Varians variabel (Variable Manufacturing


Overhaed Variance ). VMOV
1).Spending V = Variable manufacturing
Overhead
Spending variance) VMOSV = AH(AR-SR)=
(AOVR X AH)- (SOVRXAH) = (AOVR-SOVR) AH.
2). Variable Manufacturing Overhead Efficiency
Variancer (VMOEV) = SR(AH-SH)
(SOVR xAH) (SVORxSH) = (SH-AH)SVOR

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2. Fixed Manufacturing Ovrhead Variance (FMOV)
Dicari dulu POR = Taksiran Jumlah FOH per
periode/ Taksiran Machie hours(MH) atau unit
yg diproduksi per periode.
Contoh :
Untuk bulan Oktober 2006 Biaya FOH tetap ditaksir
$ 381.000, jumlah unit diprodusi maka biaya per unit
(POR) = $ 31.000/1.000 = $ 381/unit. Dalam perhitungan
Flexible Budget harus dapat ditntukan taksiran
Demoninatory Actvity yaitu tingkat ketigatan aktivitas
pada jumlah jam mesin/JTKL tertentu diatnara relevan
range untuk periode masa depan yang ditetapkan pada
awal tahun anggaran.Varians pada FOH teap, ada dua
varians.

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3). Fixed Manufacturuing overhead Volume Variance (FMOVV) :
Volume Variance= POR x ( DMH - SMH) atau
Fixed portion of the POR x( DM SH allowed).

DM=Denomitory activity. Penggunaan Denomitory aktivity


ada 3 hal diperhatikan :
a. Jika Denominator activity sama dengan jam standar
allowed pada priode ini maka Volume Varians nihil.
b. JIka denominator activity lebih besar dari jam standard
allowed dalam priode ini kemudian timbul varians
volume UF, berarti penggunaan di bawah fasilitas yang
tersedia.
c. Jika denominator activity lebih kecil dari jam standar
allowed dalam priode ini, kemudian timbul varians volume UF,
berarti penggunaan yang tinggi terhadap fasilitas yang
tersedia dibandingkan yang yang telah direncanakan.
4).Fixed Manufactruing Overhead Budget variance atau
Budget Variance= Actual Fixed FOH cost- Budgeted Fixed
FOH Cost.
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1.Contoh .
Kohn Mountain menggunakan Flexible Budget untuk
operasi perusahaannya dan mempunyai data sebagian
dari relevant range 5.000 unit 10.000 unit.
Biaya 5.000unit 10.000 unit.
Depresiasi $ 3.000 $ 3.000
Power 10.000 20.000
Bahan tak langsung 9.000 10.000
Pemeliharaan 8.500 10.000
Biaya lainnya . 5.000 7.000
Jumlah $ 35.500 $ 50.000

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Diminta :
a. Susunlah Flexible Budget dalam
kompenen biaya .
b. Buatlah Flexible budget dengan
kenaikan 1.250 unit.
c. Grafik Flexible budget.
d. Hitunglah semi variabel cost pada
tingkat aktivitas 7.500 unit.

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Jawab :
1. Flexible budget dengan analisis kompenen.
Biaya tetap adalah depresiasi = $ 3.000.
2 -Power : maksimum = $ 20.000 = 10.000 unit
minimum = $ 10.000 = 5.000 unit
High and low $ 10.000 = 5.000 unit
Elemen variabel $ 10.000/5.000 = $ 2.
Elemen tetap :maksimum =10.000x$2 = $
20.000, sama dengan biayanya $20.000,Elemen
tetap= 0

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3. Bahan tidak langsung dengan hal yang sama:
Elemen variabel = Mak 10.000 unit = $ 10.000
Min 5.000 unit = 9.000
5.000 unit = $ 1.000
Elemen variabel= $ 1.000/5000 = $ 0,20 unit
Elemen tetap = Mak: 10.000 = $ 10.000
10.000x0,20 = . 2.000
Elemen tetap $ 8.000

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4. Pemeliharaan : Mak:10.000 unit = $ 10.000
5.000 unit = 8.500
5.000 unit $ 1.500
Elemen variabel = $1.500/5000 = $0,30.unit
Elemen tetap Mak =10.000. = $ 10.000
10.000x 0,30= . 3.000
Elemen tetap $ 7.000

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5. Biaya lainnya: Mak :10.000 =$ 7.000
Min 5.000 = 5.000
5.000 = $ 2.000
Element variabel = $ 2.000/5.000 = $ 0,40 unit
Elemen tetap = $ 7.000 ( $0,40 x 10.000)
= $ 3.000

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Budget Flexible dengan kompenen (bentuk High
and low) adalah berikut ini :
Relevan Range 5.000 10.000 unit
. Biaya Tetap Biaya Variabel
Depresiasi 3.000 0
Power 0 $ 2 /unit
Bahan tak langsung 8.000 0,20 /unit
Pemeliharaan 7.000 0,30 /unit
Biaya lainnya . 3.000 0,40 /unit
Jumlah $ 21.000 $2.90 /unit

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Dari hasil diatas dapat dihitung pada tingkat relevant range
tertentu dengan rumus Y = a + bx atau $ 21.000+2,90X

Relevant range ( unit)


Biaya 5.000 6.250. 7.500 8.750 . 10.000
Depresiasi 3.000 3.000 3.000 3.000. 3.000
Power 10.000 12.500 15.000 17.500 20.000
Bahan tak langs 9.000 9.250 9.500 9.750 10. 000
Pemeliharaan 8.500 8.875 9.250 9.625 10.000
Biaya lainnya 5.000 5.500 6.000 6.500 7.000
Jumlah 35.500 39.125 42.750 46.375 50.000

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c. Grafik Flexible Budget, hampir sama dengan grafik Fixed Cost
dan Variabel cost.
d. Menghitung Biaya Semi Variabel pada tingkat 7.500 unit
Perguanakan Formula Y = a + bX
Bahan tak langsung = $ 8.000 + $0,20 X
Pemeliharaan = 7.000 + $0,30 X
Biaya lainnya = 3.000 + $0,40X
Jumlah Y = $ 18.000+ $0,90X
Tingat relevant range 7.500, maka biaya semi variabelnya
adalah $ 18.000 +( $0,90 x 7.500) = $ 24.750.
Depresiasi dan Power tidak dihitung karena kedua bersifat
tetap dan variabel secara total.
Bahan lainnya dapat dilihat dari Power Point berikut ini.

McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003


Static Budgets and
Performance Reports
Hmm! Comparing
static budgets with
Static budgets are actual costs is like
prepared for a single, comparing apples
planned level of and oranges.
activity.
Performance
evaluation is difficult
when actual activity
differs from the
planned level of
activity.
Lets look at CheeseCo.
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Static Budgets and
Performance Reports
CheeseCo

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Static Budgets and
Performance Reports
CheeseCo

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Static Budgets and
Performance Reports
CheeseCo

U = Unfavorable variance
CheeseCo was unable to achieve
the budgeted level of activity.

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Static Budgets and
Performance Reports
CheeseCo

F = Favorable variance that occurs when


actual costs are less than budgeted costs.

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Static Budgets and
Performance Reports
CheeseCo

Since cost variances are favorable, have


we done a good job controlling costs?

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Flexible Budgets
Show revenues and expenses
that should have occurred at the
actual level of activity.

May be prepared for any activity


level in the relevant range.

Reveal variances due to good cost


control or lack of cost control.

Improve performance evaluation.

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Preparing a Flexible Budget

To a budget we need to know that:


Total variable costs change
in direct proportion to
changes in activity.
Total fixed costs remain
unchanged within the
relevant range. Fixed

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Preparing a Flexible Budget
CheeseCo
Cost Total Flexible Budgets
Formula Fixed 8,000 10,000 12,000
Per Hour Cost Hours Hours Hours
Machine hours 8,000 10,000 12,000
Variable costs Variable costs are expressed as
Indirect labor 4.00 a constant
$ 32,000 amount per hour.
Indirect material 3.00 24,000
Power 0.50 $40,000
4,000 10,000 hours is
Total variable cost $ 7.50 $4.00 per hour.
$ 60,000

Fixed costs
Fixed costs are
Depreciation $12,000
Insurance 2,000 expressed as a
Total fixed cost total amount.
Total overhead costs

McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003


Preparing a Flexible Budget
CheeseCo
Cost Total Flexible Budgets
Formula Fixed 8,000 10,000 12,000
Per Hour Cost Hours Hours Hours
Machine hours 8,000 10,000 12,000
Variable costs
Indirect labor 4.00 $ 32,000
Indirect material 3.00 24,000
Power 0.50 4,000
Total variable cost $ 7.50 $ 60,000

Fixed costs
Depreciation $4.00 per hour 8,000 hours = $32,000
$12,000
Insurance 2,000
Total fixed cost
Total overhead costs

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Preparing a Flexible Budget
CheeseCo
Cost Total Flexible Budgets
Formula Fixed 8,000 10,000 12,000
Per Hour Cost Hours Hours Hours
Machine hours 8,000 10,000 12,000
Variable costs
Indirect labor 4.00 $ 32,000
Indirect material 3.00 24,000
Power 0.50 4,000
Total variable cost $ 7.50 $ 60,000

Fixed costs
Depreciation $12,000 $ 12,000
Insurance 2,000 2,000
Total fixed cost $ 14,000
Total overhead costs $ 74,000 ?

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Preparing a Flexible Budget
CheeseCo
Cost Total Flexible Budgets
Formula Fixed 8,000 10,000 12,000
Per Hour Cost Hours Hours Hours
Machine hours 8,000 10,000 12,000
Variable costs
Indirect labor 4.00 $ 32,000 $ 40,000
Indirect material Total
3.00 fixed costs
24,000 30,000
Power 0.50not change 4,000
do in 5,000
Total variable cost $ 7.50 $ 60,000 $ 75,000
the relevant range.
Fixed costs
Depreciation $12,000 $ 12,000 $ 12,000
Insurance 2,000 2,000 2,000
Total fixed cost $ 14,000 $ 14,000
Total overhead costs $ 74,000 $ 89,000

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Preparing a Flexible Budget
CheeseCo
Cost Total Flexible Budgets
Formula Fixed 8,000 10,000 12,000
Per Hour Cost Hours Hours Hours
Machine hours 8,000 10,000 12,000
Variable costs
Indirect labor 4.00 $ 32,000 $ 40,000 $ 48,000
Indirect material 3.00 24,000 30,000 36,000
Power 0.50 4,000 5,000 6,000
Total variable cost $ 7.50 $ 60,000 $ 75,000 $ 90,000

Fixed costs
Depreciation $12,000 $ 12,000 $ 12,000 $ 12,000
Insurance 2,000 2,000 2,000 2,000
Total fixed cost $ 14,000 $ 14,000 $ 14,000
Total overhead costs $ 74,000 $ 89,000 $ 104,000

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Flexible Budget
Performance Report
Flexible budget is CheeseCo
prepared for the Cost Total
same activity level
Formula Fixed Flexible Actual
Per Hour Costs Budget Results Variances
(8,000 hours) as
Machine hoursachieved.
actually 8,000 8,000 0
Variable costs
Indirect labor $ 4.00 $ 34,000
Indirect material 3.00 25,500
Power 0.50 3,800
Total variable costs $ 7.50 $ 63,300
Fixed Expenses
Depreciation $ 12,000 $ 12,000
Insurance 2,000 2,050
Total fixed costs $ 14,050
Total overhead costs $ 77,350

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Flexible Budget
Performance Report
CheeseCo
Cost Total
Formula Fixed Flexible Actual
Per Hour Costs Budget Results Variances
Machine hours 8,000 8,000 0
Variable costs
Indirect labor $ 4.00 $ 32,000 $ 34,000 $ 2,000 U
Indirect material 3.00 24,000
Power 0.50 4,000
Total variable costs $ 7.50 $ 60,000
Fixed Expenses
Depreciation $ 12,000 $ 12,000
Insurance 2,000 2,000
Total fixed costs $ 14,000
Total overhead costs $ 74,000

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Flexible Budget
Performance Report
CheeseCo
Cost Total
Formula Fixed Flexible Actual
Per Hour Costs Budget Results Variances
Machine hours 8,000 8,000 0
Variable costs
Indirect labor $ 4.00 $ 32,000 $ 34,000 $ 2,000 U
Indirect material 3.00 24,000 25,500 1,500 U
Power 0.50 4,000
Total variable costs $ 7.50 $ 60,000
Fixed Expenses
Depreciation $ 12,000 $ 12,000
Insurance 2,000 2,000
Total fixed costs $ 14,000
Total overhead costs $ 74,000

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Flexible Budget
Performance Report
CheeseCo
Cost Total
Formula Fixed Flexible Actual
Per Hour Costs Budget Results Variances
Machine hours 8,000 8,000 0
Variable costs
Indirect labor $ 4.00 $ 32,000 $ 34,000 $ 2,000 U
Indirect material 3.00 24,000 25,500 1,500 U
Power 0.50 4,000 3,800 200 F
Total variable costs $ 7.50 $ 60,000 $ 63,300 $ 3,300 U
Fixed Expenses
Depreciation $ 12,000 $ 12,000 $ 12,000 0
Insurance 2,000 2,000 2,050 50 U
Total fixed costs $ 14,000 $ 14,050 50 U
Total overhead costs $ 74,000 $ 77,350 $ 3,350 U

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Static Budgets and Performance
How much of the $11,650 is due to activity
and how much is due to cost control?
Static Actual
Budget Results Variances
Machine hours 10,000 8,000 2,000 U
Variable costs
Ind irect labor $ 40,000 $ 34,000 $6,000 F
Indirect materials 30,000 25,500 4,500 F
Power 5,000 3,800 1,200 F
Fixed costs
Depreciation 12,000 12,000 0
Insurance 2,000 2,050 50 U
Total overhead costs $ 89,000 $ 77,350 $11,650 F

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Flexible Budget
Performance Report
Overhead Variance Analysis
Static Lets place Actual
Overhead the flexible Overhead
Budget at budget for at
10,000 Hours 8,000 Hours
8,000 hours
$ 89,000 here. $ 77,350

Difference between original static budget


and actual overhead = $11,650 F.

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Flexible Budget
Performance Report
Overhead Variance Analysis
Static Flexible Actual
Overhead Overhead Overhead
Budget at Budget at at
10,000 Hours 8,000 Hours 8,000 Hours
$ 89,000 $ 74,000 $ 77,350

Activity Cost control

This $15,000F variance is This $3,350U flexible


due to lower activity. budget variance is due
to poor cost control.

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Flexible Budget
Performance Report
There are two primary
reasons for unfavorable
variable overhead variances:
What causes 1. Spending too much for
the cost resources.
control variance?
2. Using the resources
inefficiently.

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Overhead Rates and
Overhead Analysis
Recall that overhead costs are assigned to
products and services using a
predetermined overhead rate (POHR):
Assigned Overhead = POHR Standard Activity

Overhead from the


flexible budget for the
denominator level of activity
POHR =
Denominator level of activity

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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 ? $ 9,000 ?
4,000 8,000 ? 9,000 ?

Lets calculate overhead rates.

ColaCo applies overhead based


on machine hour activity.
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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 $ 2.00 $ 9,000 ?
4,000 8,000 2.00 9,000 ?

Rate = Total Variable Overhead Machine Hours

This rate is constant at all levels of activity.


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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 $ 2.00 $ 9,000 $ 4.50
4,000 8,000 2.00 9,000 2.25

Rate = Total Fixed Overhead Machine Hours

This rate decreases when activity increases.


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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 $ 2.00 $ 9,000 $ 4.50
4,000 8,000 2.00 9,000 2.25

The total POHR is the sum of


the fixed and variable rates
for a given activity level.
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Variable Overhead Variances
Example
ColaCos actual production for the period required
3,200 standard machine hours. Actual variable
overhead incurred for the period was $6,740.
Actual machine hours worked were 3,300.

Compute the variable overhead spending and


efficiency variances.

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Variable Overhead Variances
Actual Flexible Budget Flexible Budget
Variable for Variable for Variable
Overhead Overhead at Overhead at
Incurred Actual Hours Standard Hours
AH AR AH SR SH SR

Spending Efficiency
Variance Variance
Spending variance = AH(AR - SR)
Efficiency variance = SR(AH - SH)

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Variable Overhead Variances
Example
Actual Flexible Budget Flexible Budget
Variable for Variable for Variable
Overhead Overhead at Overhead at
Incurred Actual Hours Standard Hours
3,300 hours 3,200 hours

$2.00 per hour $2.00 per hour
$6,740 $6,600 $6,400

Spending variance Efficiency variance


$140 unfavorable $200 unfavorable
$340 unfavorable flexible budget total variance
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Variable Overhead Variances
Example
Actual Flexible Budget Flexible Budget
Variable for Variable for Variable
Overhead Overhead at Overhead at
Incurred Actual Hours Standard Hours
2,050 hours 2,100 hours

$5 per hour $5 per hour
$10,950 $10,250 $10,500

Spending variance Efficiency variance


$700 unfavorable $250 favorable
$450 unfavorable flexible budget total variance
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Variable Overhead Variances
A Closer Look
Spending Variance Efficiency Variance
Results from paying more
Controlled by
or less than expected for
managing the
overhead items and from
overhead cost driver.
excessive usage of
overhead items.

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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 $ 2.00 $ 9,000 $ 4.50
4,000 8,000 2.00 9,000 2.25

What is ColaCos fixed overhead rate for an


estimated activity of 3,000 machine hours?

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Overhead Rates and
Overhead Analysis Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Variable Overhead Fixed Overhead
Hours Overhead Rate Overhead Rate
2,000 $ 4,000 $ 2.00 $ 9,000 $ 4.50
4,000 8,000 2.00 9,000 2.25

Fixed Overhead Rate


FR = $9,000 3,000 machine hours
FR = $3.00 per machine hour
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Fixed Overhead Variances
Example
ColaCos actual production required 3,200
standard machine hours. Actual fixed overhead
was $8,450.

Compute the fixed overhead budget and volume


variances.

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Fixed Overhead Variances
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
Incurred Budget Applied
SH FR

Budget Volume
Variance Variance
FR = Standard Fixed Overhead Rate
SH = Standard Hours Allowed

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Fixed Overhead Variances
Example
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
Incurred Budget Applied
SH FR
3,200 hours

$3.00 per hour
$8,450 $9,000 $9,600

Budget variance Volume variance


$550 favorable $600 favorable
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Quick Check
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
Incurred Budget Applied
SH FR
2,100 hours

$7.00 per hour
$14,800 $14,450 $14,700

Budget variance Volume variance


$350 unfavorable $250 favorable
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Fixed Overhead Variances
A Closer Look
Budget Variance Volume Variance

Results from paying more Results from operating


or less than expected for at an activity level
overhead items. different from the
denominator activity.

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Fixed Overhead Variances
Cost

$9,000 budgeted fixed OH

Volume
3,000 Hours
Expected
Activity The McGraw-Hill Companies, Inc., 2003
McGraw-Hill/Irwin
Fixed Overhead Variances
Cost

$9,000 budgeted fixed OH


$550
Favorable
{ $8,450 actual fixed OH
Budget
Variance

Volume
3,000 Hours
Expected
Activity The McGraw-Hill Companies, Inc., 2003
McGraw-Hill/Irwin
Fixed Overhead Variances
3,200 machine hours $3.00 fixed overhead rate
Cost
$600
Favorable $9,600 applied fixed OH
Volume
Variance { $9,000 budgeted fixed OH
$550 { $8,450 actual fixed OH
Favorable
Budget
Variance

Volume
3,000 Hours 3,200
Expected Standard
Activity Hours
The McGraw-Hill Companies, Inc., 2003
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Volume Variance A Closer
Look
Volume
Variance

Results when standard hours


allowed for actual output differs
from the denominator activity.

Unfavorable Favorable
when standard hours when standard hours
< denominator hours > denominator hours
McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003
Overhead Variances and Under-
or Overapplied Overhead Cost
In a standard
cost system:

Unfavorable Favorable
variances are equivalent variances are equivalent
to underapplied overhead. to overapplied overhead.

The sum of the overhead variances


equals the under- or overapplied
overhead cost for a period.
McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003
CONTOH LAINNYA DARI FLEXIBLE BUDHET

Data for manufacturing Overhead of Tiagaroda Company are given below.


lexible Budget at various level of activity (hours)
Cost Formula Direct Labor Activity ( Hours)
.
Overhaed Cost Per direct labor hours 10.000 12.000 14.000 16.000
Variable Overhead cost
Utilitties $ 3,00 30.000 36.000 42.000 48.000
Indirect labor 1,50 15.000 18.000 21.000 24.000
Suplies . 2,50. 25.000 30.000 35.000 40.000
Total Variavel overhead cost $ 7,00 70.000 84.000 98.000 112.000
Fixed Overhead cost
Depreciation 18.000 18.000 18.000 18.000
Insurance 33.000 33.000 33.000 33.000
Supervisor 19.000 19.000 19.000 19.000
Total Fixed Overhead Cost 70.000 70.000 70.000 70..000
Total Overhead Cost 140.000 154.000 168.000 182.000

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Four hours of direct labor time are required per unit product. The Tigaroda Coy
has set demonitory activity for coming priod at 14..000 direct labor (DLHs)
or 3.500 units.
Assumse the following actual results for the priod.
- Number of units produced 3.625 units.
- Standard direct labors (DLHs) allowed 14.500 jam
- Actual direct labor hours 14.800jam
- Actual fixed overhead cost $ 72.000
- Actual variable overhead cost $ 104.000
Required:
a. Compute predetermined over rate (POR) an break it down into variable and
fixed cost
elements
b. Analyze the $................? Under or over applied Overhead.
c. Compute the four variance of Overhead.
JAWAB:

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POR tingkat denomitory activity 14.000 DLH . POR
dalam DLHs =$ 168.000/14.000 = $ 12 DLHs
Elemen variabel = 98.000/14.000 = $ 7 DLH, jadi
elemen tetap $ 12 - $ 7 = $ 5 DLH
B.Analisis under or over applied dari overhead.
Total Overhead aktual = $ 72.000 + $ 104.000
= $ 176.000
Standard DLH 14.500 x $12dlh = $ 174.000
Overhead under applied $ 2.000

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Four FOH Variance.
Overhead Fixed variance.
1.Budget variance= Actual fixed FOH
Flexible budget $ 72.000 (Dominotory
axtivity x elements fixed) =
$ 72.000- ($ 14.000 x $5) = $ 2.000 UF

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2) Volume variance: = (Fixed portion of the
PORx Donomintory activity)- Standard Hours.
= $ 5( 14.000 - 14.500 ) = $ 2.500 F.
FOH variable variance.
3). Spending variance = (AR SR) AH = $
104. 000 ( 14.800 x 7)
= 104.000.000 106.000= $ 2.000 UF
4). Eficiency = SR(AH-SH) = $7 ( 14.800
- 14.500) = $ 2.100 UF

McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003


3. Rekapitulasi Varians:
Fixed FOH variance.
- Budget variance $ 2.000 UF
- Volume variance 2.500 F
Variable FOH variance.
- Spending variance 2.000 UF
- Efficeincy variance 2.100 UF
Total Variance $ 3.600 UF

McGraw-Hill/Irwin The McGraw-Hill Companies, Inc., 2003


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