Flexible Budgets
The Flexible budgeted amount added to flexible budget variance
What is the actual result in the flexible budget?
The person responsible in ensuring a favorable quality variance through controlling material usage.
Who is the production department/manager?
Measure of difference between the actual cost of direct labour and the standard cost of direct labour utilized during a period
What is Labour Cost Variance?
The formula to compute variable overhead spending.
What is AH(AR-SR)?
Actual Fixed overhead cost - Budgeted Fixed overhead cost
What is Budget Variance?
Flexible budget amount added with variable overhead flexible budget variance
What is the calculation for actual costs incurred?
The price variance is computed based on the entire quantity purchased while the quantity variance is calculated based on the quantity used.
What happens what the amount of material purchased differs form the amount used?
Multiplying the standard rate by the actual hours
What is standard cost of the actual hours(used)?
The formula to calculate variable overhead efficiency
What is SR(AH-SH)?
Overhead allocation based on predetermined overhead application rate, and the rate is applied toe the actual quantity of the allocation base consumed during a period.
What is Normal Costing System?
Sales - Variable Costs
What is Contribution Margin?
The result of more materials being used than originally budgeted
What is an unfavorable quantity variance?
Subtracting between actual and budgeted quantities you purchased for a specific price
What is Efficiency variance?
Variable overhead efficiency and labour efficiency move in tandem
What happens when variable overhead is applied on the basis of direct labour hours?
The standard hours are greater than the denominator hours
What is a favourable volume variance?
Variable cost in dollars / Total number of units sold
What is variable cost per unit?
The result of a company spending more than originally budgeted for.
What is an unfavorable price variance?
Cost efficient employment of direct labour by the organization
What is the suggestion of a favorable labour rate?
Results from paying more or less than budgeted for overhead items or from overusing overhead items.
What is spending variance?
Estimated fixed overhead cost / Estimated activity level of the allocation base
What is the predetermined overhead rate?
A relationship based on unrelated level of activity and past data of cost
What is Cost Estimation?
The person who is responsible in ensuring a favorable material price variance.
Who is the purchasing manager?
Differentiating between the actual and standard costs of the actual hours used
What is rate variance?
Variance controlled by managing the overhead cost driver.
What is efficiency variance?
Estimated activity level of the allocation base for the operating period
What is the denominator activity level?