Chapter 8-3 Flashcards

1
Q

the difference between actual variance overhead costs and flexible budget variable overhead amounts

A

variable overhead flexible budget variance

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2
Q

the difference between the actual quantity of the cost allocation base used and the budgeted quantity of the cost allocation base

A

variable overhead efficiency variance

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3
Q

the difference between the actual variable overhead cost rate and the budgeted variable overhead cost rate

A

variable overhead spending variance

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4
Q

highlights differences between actual costs and quantities versus budgeted costs and quantities for the actual output level of 10,000 jackets

A

flexible budget

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5
Q

$10,500 unfavorable for variable overhead flexible budget variance means what

A

indicates that the actual variable overhead exceeded the flexible budget amount by 10,500

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6
Q
  • whether more machine hours were ysed than planned
  • if workers were less skilled than expected in using machines
  • if there was an increase in variable overhead costs, such as maintenance
A

possible questions behind an unfavorable variance

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7
Q

measures the efficiency in using the variable overhead resources

A

efficiency variance

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8
Q

measures the difference between the actual spending on variable overhead and the expected spending based on the flexible budget

A

spending variance

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9
Q

variance can be subdivided into

A
  1. efficiency variance
  2. spending variance
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10
Q

unfavorable variance of $15,000 under variable overhead efficiency variance indicates what

A

that more machine hours were used than budgeted, increasing potential variable overhead costs

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11
Q

$4500 favorable variance under variable overehead spending variance indicates what

A

the actual cost per unit is lower than the budgeted cost per unit

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12
Q

managers use variance analysis to

A

evaluate performance and learn for future improvements

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13
Q
  • skillful negoiation by the purchasing manager
  • market oversupply
  • lower quality of inputs
A

potential causes for lower actual prices

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14
Q
  • higher skill levels of workers
  • better machine maintenance
  • improved manufacturing processes
A

potential causes for efficient use of resources

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15
Q

a favorable variance is not always desirable why

A

could be a result from lower quality inputs, less skilled workers, etc.

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