Variable Overhead Variance Essay Example | Topics and Well Written Essays - 500 words

Variable Overhead Variance - Essay Example As earlier explained, the possible causes for these adverse variable manufacturing overhead variance is over utilization of the machine hours than what was budgeted that it negates even the favorable effects of lower expenditure for such manufacture. In order to reduce the cost of expenditure for the manufacturing purposes, some direct materials are sourced from local sources which may not be of standard quality thereby increasing the time spent on machine hours to match the required sandal design specifications. Hence, the management needs to check in for quality of the raw material purchased rather than only going by price considerations so that the overall cost of manufacturing overhead reduced and even the quality of the finished product would be even better than what is marketed now. It is observed that the raw material purchases are below the budgeted standards thereby raising doubts on the quality of the raw material procured and as such, work on them becomes tedious and more time consuming in terms of machine hours. Care should be taken while selecting the right type of raw material so that in the coming months, there is no occurrence of