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overhead total variance


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In a system of standard costing, the total variance that arises in respect of fixed and variable overheads; it represents the difference between the standard overhead recovered for the actual units produced and the actual overhead incurred for a period. Where the overhead recovered exceeds the overhead incurred an over-recovery or overabsorbed overhead results. Where the overhead incurred exceeds that recovered then an under-recovery or underabsorbed overhead results. See fixed overhead total variance; variable overhead total variance.

Subjects: Accounting.


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