Flexible Budget, Standard Costing and Variance Analysis

Question 1

Revenue Price Variance Formula

Answer 1

Flexible Budget Revenue - Actual Budget Revenue

Question 2

Revenue Quantity Variance

Answer 2

Flexible Budget Revenue - Static Budget Revenue

Question 2

Labour Cost Rate Variance

Answer 2

(AQ*AP) - (AQ * SP)

Question 2

Labour Cost Efficiency Variance

Answer 2

(AQ*SP) - (FA * SQ * SP)

Question 3

Fixed Cost Volume Variance

Answer 3

(Actual Qty Of Finished Goods Produced, FA - Actual Qty Of Finished Goods Produced, FB) * Budgeted FOHR Per Unit of FG

Question 4

DM Price Variance

Answer 4

(AQ * AP) - (AQ * SP)

Note: AQ = Actual Quantity Of Dm Bought

Question 5

DM Quantity Variance

Answer 5

(AQ * SP) - (FA * SQ * SP)

Note: AQ = Actual Quantity of DM Used

Question 6

What is activity variance?

Answer 6

Flexible Budget - Static Budget

Question 7

What is Flexible Budget Variance / Flexible Spending Variance

Answer 7

Actual Budget - Flexible Budget