Cost Accounting Chapter 7

Front 1

Variance

Back 1

is the difference between actual results and expected performance.

Front 2

Budgeted Performance

Back 2

The expected performance , which is the point of reference for making comparisons

Front 3

Static Budget

Back 3

or master budget, is based on the level of output planned at the start of the budget period

Front 4

Static Budget Variance

Back 4

is the difference between the actual result and the corresponding budgeted amount in the static budget.

Front 5

Favorable variance

Back 5

denoted F in this book has the effect, when considered in isolation, of increasing operating income relative to the budgeted amount.

Front 6

Unfavorable variance

Back 6

denoted U in this book has the effect, when viewed in isolation, of decreasing operating income relative to the budgeted amount.

Front 7

Flexible Budget

Back 7

calculates budgeted revenues and budgeted costs based on the actual output in the budget period.

Front 8

Flexible budget Variance

Back 8

is the difference between an actual result and the corresponding flexible budget amount

Front 9

sales volume variance

Back 9

is the difference between a flexible budget amount and the corresponding static budget amount

Front 10

Standard input

Back 10

is a carefully determined quantity of input, such as square yards of cloth or direct manufacturing labor-hours, required for one unit of output, such as a jacket

Front 11

Standard price

Back 11

Is a carefully determined price a company expects to pay for a unit of input

Front 12

standard cost

Back 12

Is a carefully determined cost of a unit of output, such as the standard direct manufacturing labor cost of a jacket at webb.

Front 13

Selling price variance

Back 13

The flexible budget variance for revenues is called S.P. variance because it arises solely from the difference between the actual selling price and the budgeted selling price.

Front 14

Price Variance or (Rate Variance)

Back 14

Is the difference between actual price and budgeted price , multiplied by the actual input quantity, such as direct materials purchased.

Usually called rate variance when used to describe direct labor

Front 15

Efficiency Variance or (Usage variance)

Back 15

Is the difference between the actual input quantity used and the budgeted input quantity allowed for actual output, multiplied by budgeted price.