BEC 4 M7: Variance Analysis Flashcards
Direct materials efficiency variance
(actual quantity used-standard quantity used)*standard price
Direct materials price variance
actual quantity*(actual price-standard price)
Direct materials quantity usage variance
standard price*(actual quantity used-standard quantity allowed)
Direct labor rate variance
actual hours worked * (actual rate-standard rate)
VOH rate (spending) variance
actual hours*(actual rate-standard rate)
VOH efficiency variance
standard rate*(actual hours-standard hours allowed for actual production volume)
FOH budget (spending) variance
actual fixed overhead-budgeted fixed overhead
FOH volume variance
budgeted fixed overhead-standard fixed overhead cost allocated to production
sales price variance
[(actual sales price/units)-(budgeted sales price/units)]*actual units sold
sales volume variance
(actual sold units-budgeted sold units)*standard contribution margin per unit
market size variance
(acutal market size in units-expected market size in units)budgeted market share %budgeted contribution margin per unit (weighted-average)
market share variance
(actual market share %-Budgeted market share %)actual industry unitsbudgeted contribution margin per unit (weighted-average)
Overhead account balance
volume variance
+efficiency variance
+spending variance
Performance Report
actual results can be compared to budgeted results. However, usefulness is limited by existence of budget variances that may be related strictly to volume
Flexible budget
allows managers to identify how an individual change in a cost or revenue driver affects the overall cost of a process
