BEC Homework 2.3 Flashcards
The use of standard cost in the budgeting process
signifies that an organization most likely implemented an
flexible budget
Strategic budgets
long term budgets
Overhead volume variances
The overhead volume variance is a function of the budgeted amounts of overhead based on standard hours allowed compared with overhead applied at a predetermined rate to work in process.
Relevant range
Within this range Total fixed cost will not change . Variable cost will not change per unit
Budgetary control
Is the process of developing plans for a company’s expected operations and contuinuing operations to help carry out those plan
Definition of budget
process of creating a formal plan and translating goals into a quantitative format is budget.
Static budgets
Is based for one level of activity and is not adjusted for actual units
Mater Budget
A master budget is the quantification of the company’s overall plan and consists of any small budgets
Continuous budget
to add an addional period with the passage of each period
The first step in sales planning process
develop management guidelines specific to sales planning including the sales planning process and planning responsibilities A sales forecast consistant with specific guidelines cannot be gathered until the guidelines are devoloped
Rolling budget
Rolling budget continuously add a future period so that a time period is always projected into future
Flexible budgets
It is budget which is adjusted for actual level of activity
adjusted for inflation the same way as static budgets
it cannot be used to evaluate capacity utilization
Material price variance
is the responsibility of purchasing manager
Labour price variance
would not be attributable to union contract approve before the budgeting cycle. If the contract are approved before they woud be used as the basis of budget
The best basis upon which cost standards is
engineering standards based on attainable performance
