Capacity Usage Variance

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Definitions

Capacity Usage Variance Fixed Overhead Operational Efficiency Resource Utilization Budgeted Hours Manufacturing Cost Control

Capacity Usage Variance (CUV) measures the difference between the actual hours worked and the budgeted hours, specifically in relation to fixed overheads. It is an essential metric in manufacturing and production, providing insights into operational efficiency and resource utilization.

Definitions

Fixed Overhead Capacity Variance

Fixed Overhead Capacity Variance Capacity Usage Variance Idle Capacity Variance Standard Costing Budgeted Capacity Overhead Absorption Rate

In a system of standard costing, the fixed overhead capacity variance measures the difference between the actual hours worked and the budgeted capacity available, valued at the standard fixed overhead absorption rate per hour.