CHAPTER 8FLEXIBLE BUDGETS, OVERHEAD COST VARIANCES, ANDMANAGEMENT CONTROL8-1How do managers plan for variable overhead costs?lOMoARcPSD|6073250 Show Get answer to your question and much more 8-2How does the planning of fixed overhead costs differ from the planning of variableoverhead costs? Get answer to your question and much more 8-3How does standard costing differ from actual costing? Get answer to your question and much more 8-4What are the steps in developing a budgeted variable overhead cost-allocation rate?Steps in developing a budgeted variable-overhead cost rate are:1.Choose the period to be used for the budget,2.Select the cost-allocation bases to use in allocating variable overhead costs to theoutput produced,3.Identify the variable overhead costs associated with each cost-allocation base, and4.Compute the rate per unit of each cost-allocation base used to allocate variableoverhead costs to output produced.8-5What are the factors that affect the spending variance for variable manufacturingoverhead? Get answer to your question and much more 8.9. Interrelationship of VariancesWith regard to variance analysis for all production costs (direct material, direct labor, and overhead), it is important to note that each variance does not represent a separate and distinct problem to be handled in isolation. All variances in one way or another are interdependent. For example, the labor rate variance may be favorable because lower-paid workers are being used. This could lead to an (1) unfavorable material usage variance because of a higher incidence of waste, (2) unfavorable labor efficiency variance because it takes longer hours to make the equivalent number of products, (3) unfavorable overhead efficiency variance because the substandard work causes more hours to be spent for a specified output, and (4) unfavorable overhead volume variance arising from abnormally high machine breakdowns because of less skilled operators. A trade-off between variances may be a manager's objective. For example, a material price variance may be favorable because of a bargain purchase opportunity or because of a combination of available resources designed to save overall costs. However, the raw material acquired may be somewhat inferior in quality to that which is usually purchased. In processing, use of this material may lead to greater waste or more labor hours in producing a finished item that will satisfy product quality guidelines. The goal here may be to minimize total production costs through the trade-off of a favorable price variance ... “Overhead variances should be viewed as interdependent rather than independent.” Give an example.  Q: how to compute quantity/efficiency variance A: Cost accounting is beneficial since it can demonstrate where a corporation spends money, earns… Q: Explain the difference between a favorable and an unfavorable variance. A: Variance: The term variance is used under standard costing system. Variance is actually the… Q: Why are separate price and quantity variances computed? A: Click to see the answer Q: Explain and describe the overhead variance. A: Variance means when the actual cost does not match with the estimated costs. To compute the… Q: Which method is used to see if a relationship between the cost driver and total cost exists?… A: Cost drivers means activity units that will cause change in total cost for example, number of… Q: Material price variances are often isolated at the time materials are purchased, rather than when… A: A variance is the difference between standard and actual performance. In case of expense, variance… Q: What are the relations among standard costs, flexible budgets, variance analysis, and management by… A: Budgetary control focus on profits maximization of the enterprise and to accomplish this purpose,… Q: Explain variable overhead efficiency variance. A: Variable overhead efficiency variance refers to the difference between the true time it takes to… Q: Define fixed overhead variance. A: Fixed Overhead Variance is the difference between actual and absorbed fixed production overheads… Q: unfavorable variances result from increased costs A: Variance is the difference between the actual cost of production and the standard cost of actual… Q: Q.When inputs are substitutable, how can the direct materials efficiency variance be decomposed… A: Click to see the answer Q: In general, variance analysis is said to provide information about _________ and __________… A: Click to see the answer Q: What is the relationship between management by exception and variance analysis? A: Management by Exception: Management by exception is the process of finding the deviations in the… Q: Which of the following items would be useful to management in deciding whether to investigate the… A: Standard costs are the budgeted costs related with the production, manufacturing and selling of… Q: Describe a common but misleading interpretation of the fixed-overhead volume variance. Why is this… A: Flexible Budget: A flexible budget is a budget that is prepared for different levels of the… Q: Define and explain the relationship between simple variance analysis and flexible variance analysis. A: Simple variances analysis is the study of deviations of the actual result against the forecasted… Q: Explain how the two-, three-, and four-variance overhead analyses are related. A: Overhead variance is the difference between real and applied overhead. Overhead variance can only be… Q: Draw a graph showing budgeted and applied fixed overhead, and show an unfavorable (or positive)… A: Click to see the answer Q: Define unfavourable variance. A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The… Q: direct materials mix variance for this problem A: The benchmark is established in advance, and actual performance is assessed in comparison to it.… Q: What types of variances are found on cost center reports? Explain what each variance is measuring… A: The variances found in the cost center report are determined by measuring actual performance against… Q: How frequently do you believe that firms should conduct variance analysis? Explain why? A: Variance analysis a technique of control that is used by organisations to compare actual costs with… Q: List the variable overhead variances, and briefly describe each. A: Click to see the answer Q: List the fixed overhead variances, and briefly describe each. A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost.… Q: Explain how to calculate static budget variance. A: Static budget: Static budget is a master budget that is prepared for only one level of sales… Q: Comment on the statement “A favourable variance is always better than an adverse variance” by… A: Variance is the difference between actual numbers and budgeted numbers. Variance can be favourable… Q: unfavorable variances result from increased costs true false A: Variance In a simple term variance means it is the difference between the actual cost which compare… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. SEE MORE QUESTIONS Recommended textbooks for you Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Accounting Information Systems ISBN:9781337619202 Author:Hall, James A. Publisher:Cengage Learning, Survey of Accounting (Accounting I) ISBN:9781305961883 Author:Carl Warren Publisher:Cengage Learning Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Accounting Information Systems ISBN:9781337619202 Author:Hall, James A. Publisher:Cengage Learning, Survey of Accounting (Accounting I) ISBN:9781305961883 Author:Carl Warren Publisher:Cengage Learning What is overhead variance with example?Variable overhead spending variance is favorable if the actual costs of indirect materials — for example, paint and consumables such as oil and grease—are lower than the standard or budgeted variable overheads. It is unfavorable if the actual costs are higher than the budgeted costs.
What are the three types of overhead variances and what are the formulas?Variable Overhead Variance Formula = Standard Variable Overhead – Actual Variable Overhead = (SR – AR) * AO. Fixed Overhead Variance Formula = (AO * SR) – Actual Fixed Overhead. Sales Variance Formula = (BQ * BP) – (AQ * AP)
What are the different types of overhead variances?Types of Overhead Variances. Fixed Overhead Volume Variance. ... . Variable Overhead Efficiency Variance. ... . Variable Overhead Spending Variance.. How can flexible budget variance analysis be used to control costs of activity areas?Flexible-budget variance analysis can be used in the control of costs in an activity area by isolating spending and efficiency variances at different levels in the cost hierarchy.
|
Overhead variances are interdependent rather than independent. give an example.
zusammenhängende Posts
Urheberrechte © © 2024 defrojeostern Inc.
