10014_050510_18 - Total favorable OH = overapplied OH IV...

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II. FOH different variance template Actual Budget Applied (SQ x SP) |-------FOH Budget variance------------------| |-----------FOH volume variance---------------------| FOH volume variance How well are we using our resources 1. Measure of how well we used our facilities 2. Activity related – did our actual production exceed or was it under our budgeted production? o U = operated below planned level o F = operated above planned level III. Variance analysis takes under/over applied OH and breaks it up Under & Over Applied OH 4 variances related to OH (Add them together) o VOH spending o VOH efficiency o FOH budget o FOH volume In example (worksheet): 400 F + 300 U + 900 U + 6000 U = 6800 U Actual OH Applied OH VOH 28,700 28,800 (2400 x 4) FOH 30,900 24,000 (9600 x 5.50) 59,600 52,800 = Underapplied by $6,800 Total unfavorable OH variance = underapplied OH
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Unformatted text preview: Total favorable OH = overapplied OH IV. Manufacturing Cycle Efficiency (MCE) • Wait time – time between when Sales receives Order and Start production • Through put time – time between Start production and Customer Order Shipped o Process (only value-added time) + Inspection + Move time + Queue time • Delivery time – “overall cycle” |---Sales receives order--------Start production-----------------------------Customer order shipped---| MCE = Process time/Through put time what % of manufacturing time is good time? Example: Wait time = 17 days Inspection time = .4 Move time = .6 Process time = 2 days Queue time = 5 days Delivery time = 25 days = 2/8 25% MCE – unit is only worked on 25% of the time in production...
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