Chapter 9: Flexible Budgets, Standard Costs, Variance Analysis Flashcards
A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.
Flexible Budget
The standard quantity allowed of an input per unit of a specific product, multiplied by the standard price of the input.
Standard cost per unit
The difference between the actual quantity of materials used in production and the standard quantity allowed for the actual output, multiplied by the standard price per unit of materials.
Materials quantity variance
The difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period.
Variable overhead rate variance
The difference between how much a cost should have been, given the actual level of
activity, and the actual amount of the cost.
Spending variance
A detailed listing of the standard amounts of inputs and their costs that are required to produce one unit of a specific product.
Standard cost card
The difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period.
Labor rate variance
The time that should have been taken to complete the period’s output. It is computed by multiplying the actual number of units produced by the standard
hours per unit.
Standard hours allowed for actual output
The labor rate that should be incurred per hour of labor time, including employment taxes and fringe benefits.
Standard rate per hour
A management system in which actual results are compared to a budget.
Significant deviations from the budget are flagged as exceptions and investigated further.
Management by exception
The price that should be paid for an input.
Standard price per unit
The difference between the actual level of activity (direct labor-hours, machine-hours, or some other base) and the standard activity allowed, multiplied by the variable part of the predetermined overhead rate.
Variable overhead efficiency variance
A budget created at the beginning of the budgeting period that is valid only for the planned level of activity.
Planning budget
The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.
Materials Price Variance
The difference between the actual hours taken to complete a task and the standard hours allowed for the actual output, multiplied by the standard hourly labor rate.
Labor efficiency variance
