Chap 8: flex budgets, standard costs, variance analysis

Question 1

Flexible budget

Answer 1

report showing estiamtes of what revenues and costs should have been, given the actual level of activity for period

Question 2

labor effeciency variance

Answer 2

diff betwn actual hours used to complete task vs. standard hours allowed for actual output X standard hourly labor rate

Question 3

Labor rate variance

Answer 3

diff btwn actual hourly labor rate and standard rate, multiplied by the number of hours worked during the period.

Question 4

Mgmt by exception

Answer 4

actual results are compared to a budget. deviations from budget are checked

Question 5

Materials price variance

Answer 5

the difference btwn actual unit price paid for an item and the standard price. multiplied by quantity purchased

Question 6

Materials quantity variance

Answer 6

dif between actual quantity of materials used in production and the standard quantity allowed for actual output multiplied by the standard price per unit of materials

Question 7

Planning budget

Answer 7

budget created at beginning of budget period that is valid only for the planned level of act

Question 8

price variance

Answer 8

variance computed by taking diff betwn actual price and the standard price and multiplying the result by the catual quantity of output

Question 9

quantity variance

Answer 9

variance computed by taking diff btwn actual quantity input and amount input shoudl have been used. multiplying by standard price

Question 10

Revenue variance

Answer 10

diff btwn revenue shouldve been, given actual level of act and actual revenue for period.

Question 11

Spending variance

Answer 11

diffbetween how much cost shoudl be given actual level of activity and actual cost

Question 12

standard cost per unit

Answer 12

standard quantity X standard price

Question 13

standardhours allowed for actual output

Answer 13

time allowed to complete period output. actual number units Xstandard hours per unit

Question 14

standard price per unit

Answer 14

price paid for input

Question 15

var overhead effeciency variance

Answer 15

actual levl activity-standard act X var predetermined OH rate

Question 16

VOH rate var

Answer 16

diff between actual variable oh cost incurred during period and standard cost that should have been incurred based on theactual activity of the period