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1. Variable Overhead Variance (VOH) Concepts VOH Rate: Pre-determined during budgeting. Applied when production occurs → called Applied Variable Overhead. Accounting System captures actual VOH incurred. In between: we calculate Budgeted VOH for Actual Quant...

1. Introduction In many industrial products (e.g., pharmaceuticals, food), multiple materials or ingredients are used. Each material's variance can be computed individually if: Materials are independent. However, when materials form a mix, the interaction ...

1. Introduction Variance analysis is not limited to costs—it also applies to revenues. Actual sales and profit can deviate from budgeted values. Due to fixed costs, it's better to analyze contribution margin instead of profit. Key types of revenue-related var...

1. Variance Reporting Process The IT department typically generates and circulates variance reports. Reports are shared with departmental managers for review. Managers analyze variances relevant to their departments and identify causes. 2. Budget Committee ...