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
activity)
of 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
yang
dengansamacara 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.
.
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).

D
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. ahan tidak langsung dengan hal yang sama:
B lemen variabel = Mak 10.000 unit = $ 10.000
E 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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 B udget 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 20.00
Bahan tak langs 9.000 9.250 9.500 9.750 0
Pemeliharaan 8.500 8.875 9.250 9.625 10. 000
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.
d. Menghitung Biaya Semi Variabel pada tingkat 7.500 unit
M
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.

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 Static Budgets and
Performance Reports
Hmm! Comparing
static budgets with
St tic budgets are actual costs is like
prepared
a for a single, comparing apples
planned level of and oranges.
activity.
Performance
evaluation is
difficult
when actual
activity
differs from the Let’s look at CheeseCo.
planned level of
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 Static Budgets and
Performance Reports
CheeseCo
Static Actual
Budget Results Variances

Machine hours 10,000

Variable costs
Indirect labor $ 40,000
Indirect materials 30,000
Power 5,000
Fixed costs
Depreciation 12,000
Insurance 2,000
Total overhead costs $ 89,000
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 Static Budgets and
Performance Reports
CheeseCo
Static Actual
Budget Results Variances

Machine hours 10,000 8,000

Variable costs
Indirect labor $ 40,000 $ 34,000
Indirect materials 30,000 25,500
Power 5,000 3,800

Fixed costs
Depreciation 12,000 12,000
Insurance 2,000 2,050
Total overhead costs $ 89,000 $ 77,350

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

 Static Budgets and
Performance Reports
CheeseCo
Static Actual
Budget Results Variances
Machine hours 10,000 8,000 2,000 U

Variable costs
U = Unfavorable variance
Indirect labor $ 40,000 $ 34,000 $6,000 F
Indirect
CheeseCo
materials
was unable
30,000
to achieve
25,500 4,500 F
Power the budgeted5l,e00v0 of acti3v,8it0 1,200 F
el y0.
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

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

 Static Budgets and
Performance Reports
CheeseCo
Static Actual
Budget Results Variances

Machine hours 10,000 8,000 2,000 U

Variable costs
Indirect 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

FFixe=dFcaovsotsrable variance that occurs when

actDueaplreccoiasttiosnare less 0
thaInsurance 2,000
12n,0b0u0 dgeted12c,o00s0ts.
2,050 50 U
Total overhead costs $ 89,000 $ 77,350 $11,650 F

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 Static Budgets and
Performance Reports
CheeseCo
Static Actual
Budget Results Variances

Machine hours 10,000 8,000 2,000 U

Variable costs
Indirect 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

FiSxeindcecocstosst variances are favorable, have

wDeepdreocniaetioangood job c1o2n,0tr0o0lling 0
Insurance
co 1s2,t0s0?0
2,000 2,050 50 U
Total overhead costs $ 89,000 $ 77,350 $11,650 F

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

 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.

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

 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 expressed as a
Insurance 2,000
Total fixed cost total amount.
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
$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
3.00fixed costs 30,000
Power 24,000 5,000
do not change in
Total variable cost 0.50 4,000 $ 75,000
the
$ 7.50relevant range.
$ 60,000
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 levelFor la Fixed Flexible Actual
mu
(8,000 hours) as Perour Costs Budget Results Variances

actually achieved.
H 8,000 8,000 0
Variable
Machinecosts
hours
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

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

 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

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

 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
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003
 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
McGraw-Hill/Irwin $ 89,000 $© The
77,350 $11,650
McGraw-Hill Companies, Inc., 2003
 Flexible Budget
Performance Report
Overhead Variance Analysis
Static Let’s 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 ?

Let’s 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 Overhead Fixed Overhead
Variable Rate Overhead Rate
Hours
2,000 $ 4,000 $ 2.00 $ 9,000 ?
Overhead
4,000 8,000 2.00 9,000 ?

Rate = Total Variable Overhead ÷ Machine Hours

This rate is constant at all levels of activity.

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

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003
 Overhead Rates and
Overhead Analysis – Example
ColaCo prepared this budget for overhead:
Total Variable Total Fixed
Machine Overhead Fixed Overhead
Variable Rate Overhea Rate
Hours
2,000 $ 4,000 $ 2.00 $ d9,000 $ 4.50
Overhead
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.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003
 Variable Overhead Variances
– Example
ColaCo’s 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
V for Variable for Variable
Overhead Overhead at Overhead at
Incurred Actual Hours Standard Hours
AH × AR AH × SH ×
SR 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
V for Variable for Variable
Overhead Overhead at Overhead at
Incurred Actual Hours Standard Hours
3,300 hours 3,200 hours
× ×
$2.00 $2.00 per
per hour 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
V
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
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003
 Variable Overhead Variances
– A Closer Look
Spending Variance Efficiency Variance
Re
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.

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

 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 ColaCo’s 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
ColaCo’s actual production required 3,200
standard machine hours. Actual fixed overhead
was $8,450.

Compute the fixed overhead budget and volume

variances.

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

 Fixed Overhead Variances
Ac
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
In urred Budget Applied
c SH × FR

Budget Volume
Varianc Varianc
e e
FR = Standard Fixed Overhead Rate
SH = Standard Hours Allowed

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 Fixed Overhead Variances –
Example
Ac
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
In urred Budget Applied
c SH × FR
3,200 hours
×
$3.00
per hour
$8,450 $9,000
$9,600

Budget variance Volume variance

$550 favorable $600 favorable
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003
 Quick Check 
Ac
Actual Fixed Fixed Fixed
Overhead Overhead Overhead
In urred Budget Applied
c 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
V
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
V
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
Vol
Volume
Variance
{ $9,000 budgeted fixed OH
$550
Favorable
{
$8,450 actual fixed OH
Budget
Variance

Volume
V
3,000 Hours 3,200
Expected Standa
Activity Hours
rd
© The McGraw-Hill Companies, Inc., 2003
McGraw-Hill/Irwin
 Volume Variance – A Closer
Look

Volume
Varianc
e

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 variances Favorable variances are

are equivalent equivalent to overapplied
to underapplied overhead. 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
.
Cost Formula (hours) 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:

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

 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

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 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

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