Managerial Accounting - Chapter 8

Front 1

Static Budget

Back 1

A budget that is based on only one level of activity

Front 2

Master-Budget Variance
(Static-Budget Variance)

Back 2

The variance of actual results from the master (static) budget

Front 3

Unfavorable Cost Variance

Back 3

A variance that occurs when actual costs are more than budgeted costs

Front 4

Favorable Cost Variance

Back 4

A variance that occurs when actual costs are less than budgeted costs

Front 5

Flexible Budget
(Variable Budget)

Back 5

A budget that adjusts for changes in sales volume and other cost-driver activities

Front 6

Activity-Based Flexible Budget

Back 6

A budget based on budgeted costs for each activity and related cost driver

Front 7

Flexible-Budget Variances

Back 7

The variances between the flexible budget and the actual results

Front 8

Activity-Level Variances

Back 8

The differences between the master budget amounts and the amounts in the flexible budget

Front 9

Effectiveness

Back 9

The degree to which a goal, objective, or target is met

Front 10

Efficiency

Back 10

The degree to which an organizations uses appropriate amounts of inputs to achieve a given level of outputs

Front 11

Sales-Activity Variances

Back 11

Variances that measure how effective managers have been in meeting the planned sales objective, calculated as actual unit sales less master budget unit sales times the budgeted unit contribution margin

Front 12

Expected Cost

Back 12

The cost most likely to be attained

Front 13

Standard Cost

Back 13

A carefully determined cost per unit that should be attained

Front 14

Perfection Standards (Ideal Standards)

Back 14

Expressions of the most efficient performance possible under the best conceivable conditions, using existing specifications and equipment

Front 15

Currently Attainable Standards

Back 15

Levels of performance that managers can achieve by realiztic levels of effort

Front 16

Price Variance

Back 16

The difference between actual input prices and standard input prices multiplied by the actual quantity of inputs used

Front 17

Usage Variance (Quantity Variance, Efficiency Variance)

Back 17

The difference between the quantity of inputs actually used and the quantity of inputs that the company should have used to achieve the actual quantity of output multiplied by the standard price of the input

Front 18

Variable-Overhead Efficiency Variance

Back 18

An overhead variance caused by actual cost-driver activity differing from the standard amount allowed for the actual output achieved

Front 19

Variable-Overhead Spending Variance

Back 19

The difference between the actual variable overhead and the amount of variable overhead budgeted for the actual level of cost-driver activity