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Old Wednesday, August 04, 2010
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Default Difference b/w applied FOH and budgeted FOH?

What is the difference among actual factory overhead applied FOH and budgeted FOH?


Last edited by Andrew Dufresne; Thursday, August 05, 2010 at 12:20 AM. Reason: Please avoid using red color
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Old Thursday, August 05, 2010
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Default This will explain all, its from cost accounting book

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Sorry to say that you might have rather confused the answer-seeker.

Actual FOH:

Those FOH which actually occur at the end of the year. (Asal kharchay jo ho gae hain)

Applied FOH:

Those FOH which are obtained by multiplying FOH rate (which we estimate at the start of the year) with the actual capacity. This will tell how much factory overheads were to be expensed on the basis of actual capacity or production.

(Actual production ya capacity ki base par kharchay honey kitne chahiye thay)

Actual FOH - Appllied FOH = (Over) / under applied

Means ya actual se ziada kharcha kr dia ya efficiency ki waja se kum mei hi saara kaam ho gya.

Budgeted FOH:

Thest are the estimated cost at the start of the year.

Means k Accountant estimate krta ha k iss saal mei kitne kharche ho sakte hain i.e., according to previous history of the company and the effect of inflation.

Hope it answers the question easily.

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plz tell me abt foh variances, how we calculate foh variance, foh rate. what is three variance method, four variance method and two variance method.
what is mean by 'using two variance method for OH' which is in yr-2003 cost accounting paper of css
how we solve this. i m very confused in all foh variances
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