Managerial Study Guide 5 - Chapter 9 Flexible Budget shows the actual level of activity Planning Budget shows the budget level of activity Variance

Managerial Study Guide 5 - Chapter 9 Flexible Budget shows...

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Chapter 9 Flexible Budget – shows the actual level of activity Planning Budget- shows the budget level of activity Variance – change in the level of activity Revenue Variance- reasons are: changes in selling price, product mix, discount structure, or poor accounting controls Spending Variance – Reasons are: changes in input price, usage, or technology Flexible Budget Performance Report Actual Results Rev + Spending Var. Flexible Budget Activity Var. Planning Budget (1) (1) – (2) (2) (2) – (3) (3) Chapter 10 Direct Materials A X A A X S (AQ X SP) S X S X AO (SQ X SP X actual output) Materials Price Materials Quantity Variance Variance Spending Variance (only if produced = sold) Direct Labor A X A A X S (AH X SR) S X S X AO (SH X SR X actual output) Direct Labor Rate Direct Labor Efficiency Variance Variance Spending Variance Manufacturing Overhead

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