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Reasons for Overhead variances

Overhead or Manufacturing variances are

  1. Spending Variance
  2. Volume Variance
  3. Idle Capacity Variance 
  4. Efficiency Variance

 Reasons for Overhead variances


 • Improper planning
• Under or over absorption of fixed overheads
• Reduction of sales
• Breakdowns
• Power failure
• Labour Trouble

 Suggested course of solutions :

• Efficient planning for
better Capacity utilization
• Check on expenditure
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