[Verse 1] When production levels shift and change Manufacturing costs can seem so strange We need to break apart the variance Into spending and volume components Fixed overhead stays the same in total Variable moves with activity's protocol But when we allocate to units made That's where variances come into play [Chorus] Split it up, break it down Spending variance first is found Actual minus budgeted rate Times the hours that you calculate Volume variance tells the tale Of capacity that might fail Under-applied or over too Overhead analysis will guide you through [Verse 2] Spending variance shows efficiency Did we control costs effectively? Take actual overhead incurred Subtract the budget, that's the word Times actual hours worked today Favorable or adverse, what do the numbers say? [Chorus] Split it up, break it down Spending variance first is found Actual minus budgeted rate Times the hours that you calculate Volume variance tells the tale Of capacity that might fail Under-applied or over too Overhead analysis will guide you through [Verse 3] Volume variance measures utilization Of our manufacturing installation Budgeted hours minus actual hours Multiplied by the standard rate's powers When production exceeds the plan we made Over-applied overhead gets displayed [Bridge] Fixed overhead has two parts to see Spending and volume separately Variable overhead's got two as well Spending and efficiency to tell Four-way analysis breaks it clean Most detailed picture you've ever seen [Chorus] Split it up, break it down Spending variance first is found Actual minus budgeted rate Times the hours that you calculate Volume variance tells the tale Of capacity that might fail Under-applied or over too Overhead analysis will guide you through [Outro] From two-way up to four-way split Management insights benefit Performance measurement made clear Through overhead variances we hold dear
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