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total overhead variance |
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Definition of total overhead variancetotal overhead variancethe difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead
Related Terms:applied overheadthe amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account budget variancethe difference between total actual overhead controllable variancethe budget variance of the two variance approach to analyzing overhead variances CovarianceA statistical measure of the degree to which random variables move together. CovarianceA measure of the degree to which returns on two assets move in Direct materials mix varianceThe variance between the budgeted and actual mixes of Factory overheadAll the costs incurred during the manufacturing process, minus the Fixed overheadThat portion of total overhead costs which remains constant in size fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; fixed overhead volume variancesee volume variance labor efficiency variancethe number of hours actually worked minus the standard hours allowed for the production Labor efficiency varianceThe difference between the amount of time that was budgeted labor mix variance(actual mix X actual hours X standard rate) - (standard mix X actual hours X standard rate); labor rate variancethe actual rate (or actual weighted average rate) paid to labor for the period minus the standard rate multiplied by all hours actually worked during the period; Labor rate varianceThe difference between the actual and standard direct labor rates labor yield variance(standard mix X actual hours X standard rate) - (standard mix X standard hours X standard rate); material mix variance(actual mix X actual quantity X standard price) - (standard mix X actual quantity X standardprice); material price variancetotal actual cost of material purchased material quantity variance(actual quantity X standard price) - (standard quantity allowed standard price); material yield variance(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price); Materials price varianceThe difference between the actual and budgeted cost to Materials quantity varianceThe difference between the actual and budgeted quantities Mean-variance analysisEvaluation of risky prospects based on the expected value and variance of possible outcomes. Mean-variance criterionThe selection of portfolios based on the means and variances of their returns. The Mean-variance efficient portfolioRelated: Markowitz efficient portfolio Minimum-variance frontierGraph of the lowest possible portfolio variance that is attainable for a given Minimum-variance portfolioThe portfolio of risky assets with lowest variance. Non-production overheadA general term referring to period costs, such as selling, administration and financial expenses. noncontrollable variancethe fixed overhead volume variance; overapplied overheada credit balance in the overhead account OverheadAny cost other than a direct cost – may refer to an indirect production cost and/or to a non-production expense. overheadany factory or production cost that is indirect to Overhead allocationThe process of spreading production overhead equitably over the volume of production of goods or services. overhead application ratesee predetermined overhead rate overhead costsoverhead generally refers to indirect, in contrast to direct, overhead efficiency variancethe difference between total budgeted overhead at actual hours and total budgeted Overhead rateThe rate (often expressed per hour) applied to the time taken to produce a product/service, used to allocate production overheads to particular products/services based on the time taken. May be calculated on a business-wide or cost centre basis. overhead spending variancethe difference between total actual overhead and total budgeted overhead at actual Portfolio varianceWeighted sum of the covariance and variances of the assets in a portfolio. predetermined overhead ratean estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate Production overheadA general term referring to indirect costs. Production yield varianceThe difference between the actual and budgeted proportions RATE OF RETURN ON TOTAL ASSETSThe percentage return or profit that management made on each dollar of assets. The formula is: Return on total assetsThe ratio of earnings available to common stockholders to total assets. Return on Total Assets RatioA measure of the percentage return earned on the value of the Selling price varianceThe difference between the actual and budgeted selling price for Serial covarianceThe covariance between a variable and the lagged value of the variable; the same as standard overhead application ratea predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate Total asset turnoverThe ratio of net sales to total assets. Total Asset Turnover RatioA measure of the utilization of all of a company's assets to total contribution marginsee contribution margin total cost to account forthe sum of the costs in beginning Total debt to equity ratioA capitalization ratio comparing current liabilities plus long-term debt to Total Debt to Total Assets RatioSee debt ratio Total dollar returnThe dollar return on a nondollar investment, which includes the sum of any total expected value (for a project)the sum of the individual cash flows in a probability distribution multiplied by their related probabilities total quality management (TQM)a structural system for creating organization-wide participation in planning and implementing a continuous improvement process that exceeds Total returnIn performance measurement, the actual rate of return realized over some evaluation period. In Total revenuetotal sales and other revenue for the period shown. Known as "turnover" in the UK. total units to account forthe sum of the beginning inventory total variancethe difference between total actual cost incurred Totalization AgreementAn agreement between countries whereby an employee only has to pay Social Security taxes to the country in which he or she is working underapplied overheada debit balance in the overhead account at the end of a period; when the applied overhead amount is less than the actual overhead that was incurred variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity VarianceA measure of dispersion of a set of data points around their mean value. The mathematical VarianceThe weighted average of the squared deviations from the variancea difference between an actual and a standard or VarianceThe dispersion of a variable. The square of the standard deviation. varianceAverage value of squared deviations from mean. A measure of volatility. Variance analysisA method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved. variance analysisthe process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences Variance minimization approach to trackingAn approach to bond indexing that uses historical data to Variance ruleSpecifies the permitted minimum or maximum quantity of securities that can be delivered to volume variancea fixed overhead variance that represents
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