@kenckang
My classes always utilized the tabular format, and being a visual person, it always helps me solve problems more efficiently.
Fixed overhead spending variance is the difference between:
(Actual hours x actual rate) and (actual hours x standard rate)
If AHxAR is greater than AHxSR, then the variance is unfavorable. On the other hand, if AHxAR is less than AHxSR, the variance is favorable.
Fixed overhead production variance is another way to say efficiency variance which is the difference between:
(Actual hours x standard rate) and (standard hours x standard rate)
If AHxSR are greater than SHxSR, then the variance is unfavorable. On the other hand, if AHxSR is less than SHxSR then the variance is favorable.
Whichever form you use should give you the exact same variance, just depends on what makes the most sense for you. I like the tabular format because it's easy to remember the equations since they can be used for all variances (can use quantity and price instead of hours and rate) and it's easy to remember the difference between unfavorable/favorable (unfavorable if calculation on left is higher than calculation on right).
Hope this helps! it is how my cost accounting professor taught it to us.
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