Chapter 9 Flashcards
Control limits
the maximum allowable deviation from a standard.
Currently attainable standards
a standard that reflects an efficient operating state; it is rigorous but achievable.
Direct labor efficiency variance (LEV)
the difference between the actual direct labor hours used and the standard direct labor hours allowed multiplied by the standard hourly wage rate.
Direct labor rate variance (LRV)
the difference between the actual hourly rate paid and the standard hourly rate multiplied by the actual hours worked.
Direct materials price variance (MPV)
the difference between the actual price paid per unit of materials and the standard price allowed per unit multiplied by the actual quantity of materials purchased.
Direct materials usage variance (MUV)
the difference between the direct materials actually used and the direct materials allowed for the actual output multiplied by the standard price.
Favorable (F) variance
a variance produced whenever the actual amounts are less than the budgeted or standard allowances.
Fixed overhead spending variance
the difference between actual fixed overhead and applied fixed overhead.
Fixed overhead volume variance
the difference between budgeted fixed overhead and applied fixed overhead; it is a measure of capacity utilization.
Ideal standards
standards that reflect perfect operating conditions.
Kaizen standards
an interim standard that reflects the planned improvement for a coming period.
Mix variance
the difference in the standard cost of the mix of actual material inputs and the standard cost of the material input mix that should have been used.
Price (rate) variance
the difference between standard price and actual price multiplied by the actual quantity of inputs used.
Price standards
the price that should be paid per unit of input.
Quantity standards
the quantity of input allowed per unit of output.
Standard bill of materials
a listing of the type and quantity of materials allowed for a given level of output.
Standard cost per unit
the per-unit cost that should be achieved given materials, labor, and overhead standards.
Standard cost sheet
a listing of the standard costs and standard quantities of direct materials, direct labor, and overhead that should apply to a single product.
Standard hours allowed
the direct labor hours that should have been used to produce the actual output (Unit labor standard × Actual output).
Standard quantity of materials allowed
the quantity of materials that should have been used to produce the actual output (Unit materials standard × Actual output).
Total budget variance
the difference between the actual cost of an input and its planned cost.
Unfavorable (U) variance
a variance produced whenever the actual input amounts are greater than the budgeted or standard allowances.
Unit standard cost
the product of these two standards: Standard price × Standard quantity(SP × SQ).
Usage (efficiency) variance
the difference between standard quantities and actual quantities multiplied by standard price.
Variable overhead efficiency variance
the difference between the actual direct labor hours used and the standard hours allowed multiplied by the standard variable overhead rate.
Variable overhead spending variance
the difference between the actual variable overhead and the budgeted variable overhead based on actual hours used to produce the actual output.
Yield variance
the difference in the standard material cost of the standard yield and the standard material cost of the actual yield.
