Managerial Accounting Chapter 8

total direct labor variance

actual labor costs compared to standard labor costs

standard cost

cost expectation for price paid and amount (quantities) used

total direct materials cost variance

difference between actual materials cost and standard materials cost

variance

difference between standard and actual performance

fixed factory overhead variance

difference between the actual fixed overhead and applied fixed overhead

variable overhead efficiency variance

difference between the actual hours worked and the standard hours expected for the units produced

direct labor time variance

difference between the actual hours worked and the standard hours that should have been worked for the actual units produced

direct materials variance

difference between the actual price or amount used and the standard amount

direct materials price variance

difference between the actual price paid per unit for materials and what should have been paid per the standards

direct materials quantity variance

difference between the actual quantity of materials used and the standard materials that were expected to be used to make the actual units produced

direct labor rate variance

difference between the actual rate paid and the standard rate that should have been paid based on the actual hours worked

variable overhead rate variance

difference between the actual variable manufacturing overhead and the variable overhead that was expected given the number of hours worked

favorable variance

difference involving spending less, or using less, than the standard amount

unfavorable variance

difference involving spending more or using more than the standard amount

standard

expectation for a component used in production

ideal standard

level that could be achieved if everything ran perfectly

attainable standard

level that may be reached with reasonable effort

flexible budget

measurement and prediction of estimated revenues and costs at varying levels of production

direct labor variance

measures how efficiently the company uses labor as well as how effective it is at pricing labor

total variable overhead cost variance

total cost variance found by combining variable overhead rate variance and variable overhead efficiency variance