Chapter 7 Notes.docx - Chapter 7 Notes Do not need to know...

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Chapter 7 Notes Do not need to know journal entries on p.261-262 Perfomance Report - Management by exceptions - Motivate managers because we hold them responsible Static Budget (Master Budget) - Variable cost categories - Number of units that we expect to manufacture Actual Results – Static Budget = Variance Set two levels 1) Actual to static 2) Flexible budget Performance Report a. Variance Columns are absolute (not positive or negative) b. After variance column, favorable or unfavorable column AP = Actual Price AQ = Actual Quantity SP = Standard Price SQ = Standard Quantity Name of Company Performance Report For the Period Ended March 31, 2016 Actual Variance Flexible Variance Static/Master Units Sold (1) (2)=(1)-(3) (3) (4)=(3)-(5) (5) Selling Price Variable Cost APxAQ AQxSP SPxSQ Direct Materials Price/Cost Variance Usage/Efficiency Variance
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