Basic Variances Flashcards
1
Q
What is a flexed budget?
A
Changes as volume of activity changes.
2
Q
What is a variance analysis?
A
A variance is where budget differs from actual.
Budget revenue > Actual = adverse
Budget cost > Actual = favourable
Budget revenue
3
Q
What are potential sales variances?
A
Price changes
Volume changes
4
Q
Material variances?
A
Price changes
Useage changes
Quality
Combination of quality and quantity.
5
Q
What are potential labour variances?
A
Rate changes
Efficiency of staff
Overtime
6
Q
What are potential fixed overhead variances?
A
Fixed overheads should not change.
7
Q
What is a fixed budget?
A
Produced for a single activity level.
