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Variable overhead efficiency variance



Variable overhead efficiency variance

In a previous post, we showed how much the efficiency of a given business unit varies over time. We would like to look at the same results in a slightly different way, and instead plot the efficiency of different business units from year to year. This graph is a little hard to read, but it shows how the efficiency of different businesses varies. It also shows how, on average, the efficiency of a business unit is dependent on the efficiency of the business unit above and below it. In other words, if one business has a unit efficiency of, say, 50%, then the average of all the other units should be 50%, too.

In all things, the truth is in the details. And when I’m talking about the details, I’m talking about the #1 thing that should be the last thing you worry about: an “overhead efficiency” model. An overhead efficiency model is often used in finance, and it’s a great way to work through the logic of a business. I’m going to walk you through the steps it uses to make these decisions, and then I’ll apply it to the auto industry, so we can better understand how the business of the auto industry works.

Household accounts Variable indirect costs Efficiency gap

3. November 2020
Accounting Adam Hill

Nevertheless, overhead costs are still essential to the operation of a business, as they support the performance of profitable activities. For example, overhead costs such as factory rent allow workers to produce products that can then be sold at a profit. In addition to direct material and manufacturing costs, overhead costs are also a very important cost component. The efficiency gap is the difference between the actual consumption of a unit of something and the expected amount. The expected quantity is usually the standard quantity of direct materials, direct labor, machine time, and so on, allocated to a product.

How are absorption costs treated in GAAP?

If Connie’s Candy produced 2,200 units, the total overhead should be 10,400 units and the standard overhead rate is 4.73 (rounded). In addition to the total standard overhead rate, Connie’s Candy also wants to know the variable overhead rates at each activity level.

The actual variable indirect production costs incurred are compared with the planned costs. It is calculated by subtracting the variable overhead actually incurred from the product of the standard variable overhead rate and the hours actually worked. This is the difference between the planned and actual level of production, measured using the fixed standard cost per unit of production. The difference in fixed overhead is obtained by subtracting the actual units produced from the budgeted units and then multiplying the result by the standard fixed cost per unit. The fixed standard costs per production unit are calculated by dividing the planned fixed overhead costs by the planned production volume.

It can also be obtained by subtracting the actual hours spent in production from the planned hours and multiplying the result by the standard fixed costs per hour. It is favourable if the number of units actually produced is higher than the forecast and unfavourable if the number of units produced is lower than the forecast. Variance analysis for fixed overhead costs uses your standard cost or output quantity as a reference. The actual overhead costs or production quantities are determined and compared with the benchmark. By analyzing the standard overhead and the actual overhead, you can determine whether or not you are exceeding your budget.

This is the difference between actual hours worked and scheduled hours, which is then applied to the standard variable hourly overhead rate. Variable overhead costs are generally low compared to fixed overhead costs. As they are volume dependent, there is an argument that variable overheads should be treated as direct costs and included in the product nomenclature.

What is the variable overhead cost spread and the variable overhead performance spread?

In numerical terms, the efficiency gap of variable overhead is defined as: (actual labor hours minus budgeted labor hours) x the standard variable overhead hourly rate, which includes indirect labor costs such as payroll and security costs.

For example, suppose a company budgeted for 20 work hours, but only used 16, and the standard overhead rate is $5 per hour. A favorable overhead difference, as in this case, means that less overhead was spent to make the product than expected. If the difference is negative, it means that more hours were spent on the product than expected and that more overhead costs were incurred.

For example, suppose your small business had budgeted 410 work hours per month, but your employees actually worked 400 hours. The difference in labor efficiency would be 410 minus 400 multiplied by $20, resulting in a favorable value of $200.

Salaries of managers, cleaners, spare parts and maintenance of machines are general costs. A company usually applies this overhead on the basis of the number of working hours used to manufacture the product.

Variable costs include direct labor, direct materials, and variable overhead. Labor cost differential, or rate differential, measures the difference between your budgeted hourly rate and the actual rate you pay to the workers who directly manufacture your products. The productivity gap measures the difference between the budgeted hours worked and the actual hours worked by your employees. Compare these two outliers to determine how well your small business managed direct labor costs over the period. To calculate the overhead efficiency difference, subtract the budgeted work hours from the actual hours spent and multiply by the standard hourly overhead rate.

Fixed overhead costs are indirect production costs that are independent of production volume, such as. B. Rent for the building or plant, utilities, property taxes, depreciation and insurance costs. For example, the number of man-hours required to manufacture a certain amount of product may vary significantly from the standard or budgeted number of hours. The variance of the efficiency of variable overhead costs is one of the two components of the total variance of variable overhead costs, the other being the variance of variable overhead costs.

What is the variance of the variable transverse efficiency

Direct labor hours are those spent by the people who actually produce or modify the product. To calculate the efficiency differential for direct labor, subtract the budgeted number of labor hours from the actual number of hours and multiply by the budgeted labor cost per hour. For example, if an entity B. thought it would take 20 hours of work at $30 per hour to manufacture a product, but only took 16 hours, the difference is 4 times $30, or $120.

How do you calculate the variance of the variable heave efficiency?

The variance of variable overhead costs is the difference between actual hours worked and scheduled hours, which is then applied to the standard variable overhead rate per hour. The formula is as follows: Standard overhead rate x (actual hours – standard hours)

  • The company measures the efficiency of its production and distribution by examining the volume fluctuations resulting from the production and distribution process.

The fixed overhead efficiency bias measures how efficiently your employees produce your products. The efficiency standard for fixed overhead costs is the expected labour cost to produce a certain number of units. To determine the amount of the difference, subtract the actual hours from the standard hours and multiply that number by the standard work rate. For example, subtract four standard hours from the actual five hours to get a negative deviation of one hour.

Change in efficiency of variable overhead costs

The output gap is the difference between the actual output and the standard output of a product or production process based on standard inputs of material and labour. Variable costs vary with the level of production, as they increase as more units are produced. Direct material costs, direct labour costs and variable overheads are the main types of variable costs. Thus, if an increase in assets is avoided, the associated costs can be controlled. Although higher production generally results in higher total variable overhead costs, there may be efficiency gains with higher production.

Variable costs can be distinguished from fixed costs, which remain relatively constant regardless of the level of production or activity of the company. The firm’s fixed and variable costs make up the total cost of production.

Multiply the one-hour unfavorable deviation by the standard rate of $8, and you get an unfavorable labor deviation of $8 per unit. In business, overhead or indirect costs refer to the ongoing costs of doing business.

The company measures the efficiency of its production and distribution by examining the volume fluctuations resulting from the production and distribution process. The volume difference is the difference between the planned consumption and the actual consumption of the company. The quantity variance can be applied to sales units, direct materials, direct labor, and production overhead. The basic formula for the quantity deviation is the planned volume minus the actual volume consumed, multiplied by the planned price.

For example, efficiency differences can be calculated for the number of hours required for an audit versus the budgeted number. A statement from the production manager is often required to explain this discrepancy. Another variable for the variation in overhead costs to be considered is the variation in the efficiency of variable overhead costs. The direct labor cost variance – also known as the direct labor cost efficiency variance – is the difference between budgeted direct labor hours and actual hours spent.

In accounting, all costs can be classified as fixed or variable. Variable costs are inventory costs – they are allocated to units of production and recorded in inventory accounts, such as. B. the cost of production. Fixed costs, on the other hand, are all costs that are not inventory costs. All costs that do not vary with the volume of production are fixed costs. Fixed costs include various indirect costs and fixed production overhead costs.

Overhead costs are costs that, unlike operating costs such as raw materials and labour, cannot be easily traced or identified by a specific cost object. Overhead costs can therefore not be directly related to the products or services offered and therefore do not generate a direct profit.

This rate is determined in advance and is then applied to calculate the actual hours worked. The standard overhead rate is the total budgeted overhead rate of 10,000 divided by the service level (direct labor hours) of 2,000 hours. Fixed overhead costs remain constant at each level of production, while variable overhead costs vary with production volume. If z. B. Connie’s Candy produces only 90% of its products, so it should count on a total mark-up of 9,600 and a standard mark-up of 5.33 (rounded up).

In accounting, variable costs are costs that vary according to the output or activities of the business. Variable costs increase when the producing firm increases its production and decrease when the firm slows down its production.

In addition, discounts on large orders for raw materials due to increased production can reduce direct unit costs. Other factors that may be included in variable overheads are materials, changes in labor, and equipment maintenance. The productivity gap is equal to the number of direct working hours budgeted for the period minus the actual hours worked by employees multiplied by the standard hourly labour rate.

An incorrectly defined standard number of hours worked may result in a variance that does not reflect the actual performance of the organization. Therefore, a study of the efficiency gap in the overhead line should include an analysis of the adequacy of the baseline standard.

This is the difference between actual and budgeted variable overhead costs due to the inefficient use of indirect materials and labor. The variable overhead efficiency variance is calculated by subtracting the standard budgeted hours from the actual hours worked, and then multiplying the result by the standard variable overhead rate. There is a favourable deviation when the actual hours spent are lower than planned and an unfavourable deviation when the hours spent are higher than planned. The variance of overhead costs, also known as the variance of efficiency of overhead costs, is the difference between the amount of overhead costs booked and the amount of overhead costs actually booked. Overhead costs are all product costs incurred in the enterprise that are not part of direct labor costs or overhead costs.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”How do you calculate variable overhead efficiency variance?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Variable overhead efficiency variance is calculated by subtracting fixed overhead efficiency variance from total overhead efficiency variance.”}},{“@type”:”Question”,”name”:”How do you calculate efficiency variance?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Efficiency variance is calculated by taking the difference between the actual and target efficiency and dividing it by the target efficiency.”}},{“@type”:”Question”,”name”:”What is the formula for overhead variance?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” The formula for overhead variance is: Overhead variance = (Actual overhead cost – Budgeted overhead cost) / Budgeted units Overhead variance = (Actual overhead cost – Budgeted overhead cost) / Budgeted units”}}]}

Frequently Asked Questions

How do you calculate variable overhead efficiency variance?

Variable overhead efficiency variance is calculated by subtracting fixed overhead efficiency variance from total overhead efficiency variance.

How do you calculate efficiency variance?

Efficiency variance is calculated by taking the difference between the actual and target efficiency and dividing it by the target efficiency.

What is the formula for overhead variance?

The formula for overhead variance is: Overhead variance = (Actual overhead cost – Budgeted overhead cost) / Budgeted units Overhead variance = (Actual overhead cost – Budgeted overhead cost) / Budgeted units

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Enchanted Woods and Forest Slots: Exploring the Mystical Realm of Nature




In the realm of online casino gaming, a genre taps into the enchanting allure of nature and woodland mysteries: Forest Slots and Enchanted Woods Slots. These slots transport players into the heart of lush forests, where mythical creatures, ancient trees, and hidden treasures await discovery – play it here.

In this article, we will delve into the captivating world of Forest Slots and Enchanted Woods Slots, exploring their captivating features, woodland themes, and their magical gaming experience.

Immersed in the Wonder of Nature with Forest Slots

Forest Slots and Enchanted Woods Slots represent a captivating subgenre within online slot games, drawing inspiration from forests’ lush beauty and mystical aura. They offer a fusion of natural aesthetics, woodland creatures, and the potential for substantial real-money rewards. These slots appeal to fans of nature and wildlife and players seeking an escape into a world of tranquility and enchantment.

Key Features of Forest Slots and Enchanted Woods Slots

Lush Woodland Aesthetics

The standout feature of Forest Slots and Enchanted Woods Slots is their ability to recreate the serene and mystical ambiance of the forest. These games often boast towering trees, moss-covered stones, and enchanting glades—the graphics and animations transport players to a world of natural wonders, creating an immersive gaming experience.

Iconic Forest Symbols

Forest Slots and Enchanted Woods Slots feature symbols emblematic of the woodland realm. Players can expect to encounter woodland creatures like deer and owls, ancient trees, magical toadstools, and the elusive fairies and sprites that inhabit these enchanted woods. These symbols add to the game’s visual allure and play a critical role in determining winning combinations and triggering bonus features.

Woodland Creatures and Mystical Beings

To enhance the forest experience, these slots often incorporate encounters with mythical creatures and mystical woodland beings. Players may interact with fairies, elves, unicorns, and other fantastical inhabitants of the enchanted woods. These interactions add an extra layer of enchantment and engagement to the gameplay, providing players with a sense of wonder and magic.


Forest Magic Bonus Rounds

In Forest Slots and Enchanted Woods Slots, players often engage in bonus rounds that tap into the mystical energies of the forest. These may involve participating in magical ceremonies, uncovering hidden pathways, or seeking the blessings of ancient forest guardians. These bonus rounds immerse players in the enchanting world of the forest, intensifying the gaming experience.

Themes in Forest Slots and Enchanted Woods Slots

These slots come in a variety of themes, each offering a different woodland adventure:

Fairy Glades

These slots focus on the magical realms inhabited by fairies and sprites, where players can explore glades, seek hidden treasures, and receive the blessings of forest spirits.

Mystical Creatures

In these games, players encounter mythical creatures like unicorns, centaurs, and magical creatures as they explore the forest’s depths in search of hidden wonders.

Ancient Trees and Guardians

These slots revolve around the wisdom and magic of ancient trees, where players seek out the guidance and blessings of these wise woodland sentinels.

Woodland Treasures

In these games, players embark on quests to discover hidden treasures and uncover the riches that lie within the heart of the enchanted woods.

Winning Real Money in Forest Slots and Enchanted Woods Slots

While the immersive themes and woodland aesthetics are the main attractions, players can also win real money while enjoying Forest Slots and Enchanted Woods Slots. These games offer various opportunities to form winning combinations, trigger bonus rounds, and accumulate substantial payouts, much like traditional slots.



Forest Slots and Enchanted Woods Slots offer a uniquely immersive experience within online casino gaming. Whether you’re a fan of magical glades, encounters with mystical creatures, seeking the wisdom of ancient trees, or embarking on quests for woodland treasures, there’s a Forest Slot or Enchanted Woods Slot that can transport you to the heart of nature’s mysteries. With enchanting visuals, iconic woodland symbols, and engaging gameplay, these slots provide a truly unforgettable gaming experience. So, step into the enchanted woods and let the magic of nature guide you on a journey of wonder and discovery!

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Acquiring Sweeps Coins in Sweeptastic for 2023





Sweeptastic is a newly launched sweepstakes casino that is currently in the early stages of establishing itself in the industry. Although there are areas, such as its game library and user interface, that are still undergoing refinement, the casino shows potential, particularly with its attractive welcome offer and continuous promotions. Despite a somewhat limited range of games, Sweptastic offers a decent entry point for players looking to explore the world of sweepstakes casinos.

Legitimacy of Sweeptastic Casino

Assessing the legitimacy of an online gaming site involves subjective judgment, but there are signs and factors that can help determine the intention behind a platform.

One important consideration is the transparency of the owner company, and in the case of Sweeptastic, this information is readily available on the casino’s site – Heuston Gaming Limited with registration number 104624.

Additionally, Sweeptastic has taken steps to enhance transparency and player safety. They provide a page displaying the Return to Player (RTP) of all available games and have a Responsible Gaming page that discusses how players can have the best gaming experience while maintaining control over their habits.

With these measures, including comprehensive information and tools for self-control, Sweeptastic demonstrates a commitment to ensuring the safety and well-being of its players.


Sweptastic has a straightforward system with two virtual currencies: Gold Coins and Sweepstakes Coins, also known as Lucky Coins.

Lucky Coins (Gold Coins)

In Sweptastic, Gold Coins go by the name Lucky Coins. These coins are exclusively for playing games for fun and hold no real-world value. While the casino generously provides them for free, you also have the option to purchase additional Lucky Coins. They serve as a useful tool for exploring games before committing your valuable Sweepstakes Coins.

Sweepstakes Coins

Critical to the sweepstakes casino experience, Sweepstakes Coins are the virtual currency that transforms your in-game winnings into real money. Sweptastic retains the original name, emphasizing that winnings in Sweepstakes Coins can be redeemed for actual cash. Notably, these coins cannot be bought; however, Sweeptastic offers them abundantly through various promotions or as a bonus when you purchase Lucky Coins.

Promotional Offers at Sweeptastic

Promotions at Sweeptastic are designed to set high standards, offering players ample opportunities to enjoy their favorite games and potentially win real money rewards without the need for any purchases. Let’s delve into the details of each promotional offer:

Signup Bonus

Sweeptastic stands out by providing one of the most generous free welcome bonuses in the sweepstakes casino realm – a whopping 27,777 Gold Coins + 10 Sweepstakes Coins.


At the same time, the full offer requires account verification; merely registering grants you an initial reward of 10,000 Lucky Coins (Gold Coins).

Daily Login

Acknowledging active members, Sweeptastic adopts the common practice of a Daily Login Bonus but distinguishes itself with a substantial amount of freebies. Simply log in each day, and the casino automatically boosts your balance with 1,000 Lucky Coins.

Happy Hours

For early birds, Sweeptastic introduces Happy Hours, generously gifting 3,000 Lucky Coins every morning between 7 am and 10 am. This bonus is seamlessly added to your account upon login, requiring no additional steps or claims.

First Purchase Offer

While Sweeptastic lavishes players with substantial free coins, the extensive gaming catalog may lead to their quick depletion. In anticipation of this, the social casino presents two exclusive offers for your initial coin purchase:

  • $17.49 pack – 25,000 LC + 25 SC (30% off)
  • $29.49 pack – 45,000 LC + 45 SC (35% off)

Purchase Methods

Now that you’re acquainted with Sweeptastic’s virtual coins let’s explore the options available if you decide to make a purchase on this casino-style gaming platform. Sweeptastic offers six predefined Lucky Coin bundles, each accompanied by complimentary Sweepstakes Coins. You can make purchases using widely accepted bank cards like Visa, Mastercard, and American Express, among others. Additionally, popular online payment providers are supported, ensuring a seamless transaction experience based on our testing.

Redeeming Prizes

For many players, the most exciting aspect is whether Sweptastic truly pays out real cash prizes. The answer is a resounding yes, and the redemption process is notably faster compared to other sweepstakes casinos. You have various redemption options, including bank transfers, gift cards, and even merchandise if you prefer tangible rewards.


It’s crucial to note that to complete the redemption process; you must verify your account through KYC (providing documents for identity, address, phone, and bank account verification), wager the Sweepstakes Coins at least once (as they are received as a bonus), and have a Sweepstakes Coins balance equivalent to at least $100.


Since its inception, Sweeptastic has set the standard for how things should be done in the sweepstakes casino world. Whether it’s bonuses, games, or player care, this social casino brand truly stands out.

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Enhancing User Engagement And App Discovery: The Impact of User-Friendly Interfaces in App Catalogs




Mobile applications have become an integral part of our daily lives. From social networking to productivity tools, there is an app for everything. With millions of apps available across various platforms, app catalogs are crucial in helping users discover new applications. However, the success of these catalogs greatly depends on user experience, particularly the user-friendliness of their interfaces.

The Significance of User-Friendly Interfaces

User-friendly interfaces are essential elements of app catalogs as they directly influence how users interact with and explore the available apps. A well-designed and intuitive interface can significantly enhance the overall user experience. Here are some key factors that highlight the significance of user-friendly interfaces:

1.1 Navigational Ease

One of the primary benefits of a user-friendly interface is navigational ease. When users can easily browse through app categories, search for specific apps, and access relevant information, they are more likely to engage with the catalog for longer periods.

1.2 Visual Appeal

The visual appeal of an app catalog matters. An attractive and well-organized layout can captivate users and encourage them to explore further. A cluttered or confusing interface, on the other hand, can deter users from using the catalog.

1.3 User Feedback

User-friendly interfaces often include features for user feedback, such as ratings and reviews. This feedback helps users make informed decisions about which apps to download, enhancing their overall experience.

Comprehensive App Collection

APPiX360’s extensive app collection caters to a wide array of interests and needs. The platform regularly updates its offerings with the latest and most popular apps, ensuring users have access to the newest trends and tools. The importance of user reviews and ratings in aiding informed decisions is a testament to the platform’s user-centric approach. The platform’s commitment to ensuring safe downloads is exemplified through its stringent vetting process, which can be illustrated through the safe downloading of the Pin-up app.

Impact on User Engagement

User engagement is a crucial metric for app catalogs. It measures how actively users interact with the catalog, and user-friendly interfaces can have a profound impact on engagement levels:

2.1 Longer Time Spent

A user-friendly interface encourages users to explore more apps, leading to longer sessions within the catalog. When users find it easy to navigate, they are likely to spend more time searching for new apps and discovering content.

2.2 Higher Retention Rates

Apps with user-friendly interfaces tend to have higher retention rates. Users are more likely to return to the catalog regularly if they had a positive experience during their previous visits. This consistent engagement benefits both users and app developers.

2.3 Increased App Downloads

Improved user engagement often leads to an increase in app downloads. When users feel comfortable and confident while using the catalog, they are more likely to take the next step and download apps that pique their interest.


Impact on App Discovery

App discovery is a critical aspect of app catalogs, as it directly affects an app’s success. User-friendly interfaces play a significant role in enhancing the app discovery process:

3.1 Effective Search and Filtering

User-friendly catalogs offer efficient search and filtering options. Users can easily narrow down their choices based on categories, keywords, or ratings. This simplifies the app discovery process and helps users find relevant apps more quickly.

3.2 Personalized Recommendations

Many app catalogs use user data to provide personalized app recommendations. A user-friendly interface makes it easier for catalogs to collect and analyze user preferences, leading to more accurate and appealing app suggestions.

3.3 Social Integration

User-friendly interfaces often incorporate social features, such as sharing and following. These features enable users to discover apps recommended by their friends or influencers, fostering a sense of community within the catalog.


The Pin-Up App Download Experience

As we explore the impact of user-friendly interfaces, let’s take a closer look at the Pin-Up app download experience as an example. Pin-Up is an online casino and sports betting platform that offers a mobile app for users to enjoy their favorite games and place bets conveniently.

4.1 Navigational Simplicity

The Pin-Up app catalog boasts a user-friendly interface that simplifies the navigation process. Users can easily access different sections of the app, such as casino games, sports betting, and promotions, through a well-organized menu.

4.2 Visual Appeal

The catalog’s visual design is visually appealing, featuring vibrant colors and clear graphics. This visually engaging interface captures users’ attention and encourages them to explore the app further.

4.3 User Feedback

Pin-Up’s user-friendly interface incorporates user feedback in the form of reviews and ratings for games and sports events. This feedback helps users make informed decisions about what to play or bet on, enhancing their overall experience.


In conclusion, user-friendly interfaces are instrumental in shaping the success of app catalogs by positively impacting user engagement and app discovery. Navigational ease, visual appeal, and user feedback are key elements that contribute to a user-friendly experience. As demonstrated by the Pin-Up app download experience, a well-designed interface can enhance the overall user journey, leading to higher user engagement, increased app downloads, and improved app discovery. App catalogs that prioritize user-friendliness are more likely to thrive in the competitive digital landscape, benefiting both users and developers alike.

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