Capacity Usage Variance

Capacity Usage Variance
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.
Fixed Overhead Capacity Variance
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.

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