B2 - Planning Techniques: Budgeting and Analysis Flashcards
In regards to flexible-budget revenue variance, what is a revenue variance?
Change in unit selling price
For a company that produces more than one product, the sales volume variance can be divided into what two additional variances?
Sales Quantity Variance and Sales Mix Variance
The variance that arises solely because the quantity actually sold differs from the quantity budgeted to be sold is:
Sales volume variance.
Which Strategic Business Unit (SBU) has the least amount of responsibility? (CRPI is the MNEMONIC)
Cost SBU
What are the Types of Responsibility Segments? “CRPI”
Cost, Revenue, Profit, Investment (In that order, cost is has the least amount of responsibility)
The performance measurement tool generally associated with the display of information evaluating multiple dimensions of business outcomes is referred to as the:
Balanced Scorecard
What are the critical success factors of a Balanced Scorecard? “FICA”
Financial, Internal Business Process, Customer , Advancement of innovation of Human Resource considerations
Financial and non-financial features of an organization that contribute to its success in achieving strategy are referred to as what?
Critical Success Factors.
Balanced Scorecards serve to document the measurements of critical success factors, they are not themselves, the features of the organization that contribute to its success.
Standards imposed by management without employee input are referred to as:
Authoritative Standards
Sales Price Variance Calc
(Actual selling price per unit - Budgeted selling price per unit) X Actual sold units
What is the first step in developing a budget for the next year?
Forecast sales volume. Sales volumes will drive product supply requirements as well as purchasing and inventory requirements.
What is the order in which the four types of budgets must be prepared?
Sales, Production, Direct Materials Purchases, Cash Disbursements
What is the mnemonic to calculate and figure out variances?
SAD PURE Standard - Actual = Difference P Price Variance (for DM) U Usage (quantity) variance (for DM) R Rate Variance (for DL) E Efficiency Variance (for DL)
Then set up DADS twice
DA Difference X Actual
DS Difference X Standard
DA Difference X Actual
DS Difference X Standard
P D x A
U D x S
R D x A
E D x S
The difference between standard hours at standard wage rates and actual hours at standard wage rates is referred to as what type of variance?
Labor Usage/Efficiency variance
The difference between actual hours at standard rate and actual hours at actual rate is:
Direct Labor Rate
