B2 - Planning Techniques - Budgeting and Analysis Flashcards
Which budget is the driver of all other budgets?
The sales budget
What are the three categories into which cash budgets are divided?
Cash available
Cash disbursements
Financing (if necessary due to cash shortfall)
How is direct materials price variance calculated?
Actual quantity purchased x (actual price - standard price)
How is direct quantity usage variance calculated?
Standard price x (actual quantity used - standard quantity allowed)
How is direct labor rate variance calculated?
Actual hours worked x (actual rate - standard rate)
How is direct labor efficiency variance calculated?
Standard rate x (actual hours worked - standard hours allowed)
How is the difference calculated in variance analysis?
SAD
Standard - actual = difference
What are the four main types of variances?
PURE Price variance (for DM) Usage (quantity) variance (for DM) Rate variance (for DL) Efficiency variance (for DL)
How are the four main types of variance calculated?
DADS (x2) line up with PURE DA - difference x actual DS - difference x standard DA - difference x actual DS - difference x standard
How is sales price variance calculated?
(Actual sales price / unit - budgeted sales price / unit) x actual units sold
How is sales volume variance calculated?
(Actual sold units - budgeted sales units) x standard contribution margin per unit
How is market size variance calculated?
(Actual market size (in units) - expected market size (in units)) x budgeted market share % x budgeted contribution margin per unit (weighted-average)
What are the four types of financial performance objectives?
CRPI Strategic Business Units (SBUs) Cost SBU Revenue SBU Profit SBU Investment SBU
What are the four critical success factors of a balanced scorecard?
FICA Financial perspective Internal business procedures Customer perspective Advance learning and innovation
T/F: The cash budget is prepared before all other budgets
False; it it prepared last and the sales budget is prepared first
