Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
21 Cards in this Set
- Front
- Back
|
Standard Costs |
-standard setting process set at the beginning of the accounting period reflect what management believes costs should be, so they are difficult, but not impossible to achieve |
|
|
Standard Cost Card |
-shows what the company should spend to make a single unit if product, based on budgeted sales, production, costs |
|
|
Standard price |
-the amount that should be paid for a particular quantity of input |
|
|
Budgeted Costs |
-Based on the standard costs of inputs multiplied by a specific level of output |
|
|
Variances |
-the difference between actual and budgeted or standard costs -spending variances are calculated by comparing actual costs to flexible budget - volume variances are calculated by comparing the flexible budget to the master budget |
|
|
Tight but attainable standards |
-best for motivating employees to work hard and achieve results |
|
|
Master Budget |
-often called the STATIC BUDGET, cuz it is based on a single level of activity |
|
|
Flexible Budget |
-based on actual level of activity that is achieved -shows how total costs are expected to change if actual production or sales are more or less than expected -used to evaluate managerial performance after the fact by separating the effect of spending (that is, cost control) from the effect of volume
|
|
|
Fixed Overhead Spending Variance (aka) Fixed OH budget variance |
|
|
|
Formula: Factory OH application Rate
|
- Budgeted OH/ Budgeted activity |
|
|
|
-spending variances for DM can be decomposed to a price and quantity component -the DM price variance represents the difference between the actual and the standard price paid for DM while holding the actual of quantity of materials purchase constant -DM quantity variance represents the difference between the actual quantity of materials used in production and the standard quantity allowed given the actual units produced, holding the standard price constant - DM spending variance is the sum of the DMs price and the DM quantity variances |
|
|
Variable OH rate and efficiency variances |
- VOH rate variance represents the difference between the actual variable OH costs and the standard variable OH cost per unit of the cost driver (such as DL hours) - when variable OH is based on DL hours, the variable OH efficiency variance is driven by the difference between the actual number of labor hours and the standard number of labor hours allowed for production. Its is a mirror image of the DL efficiency variance -variable OH spending variance is the sum of the variable OH rate and the variable OH efficiency variances |
|
|
Price Variance Formula (DM Price Variance) |
- (Actual Quantity)x(Standard Price-Actual Price) |
|
|
Quantity Variance Formula (DM Quantity Variance) |
-(Standard Quantity - Actual Quantity) x (Standard Price) |
|
|
Direct Labor Rate Variance Formula |
(Actual labor hours) x (Standard labor rate- Actual labor rate) |
|
|
Direct Labor Efficiency variance formula |
- (Standard Labor Hours - Actual Labor Hours) x (Standard Labor Rate) |
|
|
Variable OH rate Variance |
(Actual Labor Hours) x (Standard labor rate - Actual labor Rate) |
|
|
Variable OH efficiency Rate |
-(Standard Labor Hours - Actual Labor Hours) x (Standard Labor Rate) |
|
|
Fixed OH spending Variance |
-Budgeted Fixed OH - Actual Fixed OH |
|
|
FOH Rate |
Total FOH cost / units |
|
|
FOH volume variance |
Applied FOH - Budgeted FOH variance |
