ACC 202 CHAPTER 9

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standard hours per unit of an output includes two things

an allowance for cleanup and downtime, the estimated time to complete the unit

the materials price variance is the difference between the actual price of materials

and the standard price for materials with the difference multiplied by the actual quantity of materials

variance cycle analysis is

begins with the preparation of the budget

standards are three things

benchmarks for measuring performance, set for each major production input or task, compared to the actual quantities and costs of inputs

volume variance is the difference between

budgeted and applied fixed overhead

the calculation of the budget variance uses

budgeted fixed overhead, actual fixed overhead

quantity variance is

calculated using the standard price of the input

the standard price per unit for direct materials

can change based on the delivery method

budget variance is the

difference between actual fixed overhead and the budgeted fixed overhead

the following two are used to calculate the standard quantity per unit of direct materials

direct materials requirements per unit of finished product, allowance for waste and spoilage

unfavorable labor efficiency can result from three things

faculty equipment, insufficient product demand, poorly motivated workers

if overhead is over applied, the total of the standard cost overhead variance Is

favorable

when the actual hourly rate is lower than the standard hourly rate, the labor rate variance is

favorable

a budget that takes into account how costs are affected by changes in level of activity is

flexible budget

materials price variance is 3 things

generally the responsibility of the purchasing manager, charged to the production manager when the production problems occur, impacted by the delivery method chosen

favorable variances x retained earnings and unfavorable variances x retained earnings

increase, decrease

excessive inventory on hand may lead to three things

inefficient operations, obsolete goods, high defect rates

materials price variance is generally calculated at the time materials are purchased because

it allows materials to be carried in inventory accounts at a standard cost, it simplifies bookkeeping, management can generate more timely variance reports

SR(AH-SH) is the formula for

labor efficiency

poor supervision is one possible cause of an unfavorable

labor efficiency variance

AH(AR-SR) is the formula for

labor rate variance

SP(AQ-SQ) is the formula for

materials quantity variance

variances are more accurate when using

multiple cost drivers

unfavorable labor rate variances may occur as a result of two problems

overtime premiums being charges to the direct labor account, skilled workers being assigned to jobs requiring little skill

most companies compute the materials price variance when materials are x and the material quantity variance when the materials are x

purchased, used

net operating income from the income statement is recorded in the x on the balance sheet

retained earnings

accounts impacted by closing standard cost variance clearing accounts are

retained earnings, cogs

calculation of standard price per unit of direct materials includes

shipping costs, purchase price of the materials, purchase discounts

unfavorable labor rate variances may occur as a result of

skilled workers being assigned to jobs that require little skill, overtime premium being charged to the direct labor account

a benchmark used in measuring performance is called a

standard

when calculating labor rate variance, multiply the actual hours worked times the x labor rate and compare it to the actual hours worked times the x labor rate

standard, actual

planning budgets are sometimes called

static budgets

an unchanged planning budget is known as a

static planning budget

quantity variance

the difference between the amount of an input used and the amount that should have been used, all evaluated at the standard price for the input

true statements

treating fixed costs as variable are necessary for product costing, fixed costs are applied to work in process like they are variable costs

if the actual cost is greater than what the cost should have been, the variance is labeled as

unfavorable

when budgeted fixed overhead costs exceeds fixed overhead applied to work in process, the volume variance is labeled

unfavorable

flexible budgets may be prepared using more than one cost driver to improve

accuracy

materials price variance is calculated using the x quantity of the input purchased

actual

price variance is the difference between

actual price and the standard price multiplied by the actual amount of the input

materials price variance uses

actual price of the input, actual quantity of the input purchased, standard price of the input

materials price variance is calculated using the

actual quantity of the input purchased

the budget variance is the difference between the x fixed overhead and the x fixed overhead

actual, budgeted

when preparing a flexible budget, the level of activity

affects the variable costs only

which of the following are used to calculate the standard quantity per unit of direct materials

allowance for waste and spoilage, direct materials requirements per unit of finished product

a flexible budget shows three things

what revenue should have been at the actual level of activity, what variable costs should have been the actual level of activity, what fixed costs should have been at the actual level of activity


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