Fixed Overhead Variance - Part 1

In this lecture, you will understand the meaning of fixed overhead variance, its importance. You will learn its formula. After this, you will study how volume and expenditure variance will equal to total fixed overhead variance.

Fixed overhead is the indirect expenses of any product which does not change by changing the quantity of product. If we do not study its variance, our this cost will increase. Due to this, we have to increase the price of our product. So, for reducing product cost and product price, we have to study fixed overhead variance. This variance may be favorable or may be unfavorable. If fixed overhead variance is unfavorable, we have to take very serious for our investigation.

Related Video : Fixed Overhead Variance -2