10026_042810_96 - *Chapter 14*-Evaluating Performance...

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-More than 2/3 of the final exam will be new material. Chapter 13 -Budgeted = Pro Forma 4 Benefits to Budgeting: 1.) Forces us to plan/think about the future. 2.) Communicates what is expected of employees 3.) Helps coordinate everyone 4.) Gives benchmark for evaluating performance Autocratic : top-down decisions; low participation Democratic : bottom-up decisions; high participation -More participation = more effort Tight Budget : difficult or impossible to achieve Loose Budget: very easy to achieve Responsibility Accounting System : once you get the numbers, figure out why they are that way. -Revenue Center & Cost Center are above the responsibility system. -Top Level = Investment Center; responsible for earning profit and doing something with it.
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Unformatted text preview: *Chapter 14*-Evaluating Performance (Control Process)-Standard Costing *Manufacturing companies only *Only for production costs *What should happen *How much time, materials, overhead, and effort Actual Static Budget $143,750 $144,000 $9,250 Favorable Static Budget Variance Variance:-Totals for time period-Favorable or unfavorable-Dollars and cents Actual Static Budget 28,000 units 30,000 units $4.8125 $4.80 $134,750 $144,000 $9,250 Favorable Actual Actual x Budgeted 28,000 units 20,000 units $4.8125 $4.80 $134,750 $134,400 $350 Unfavorable Flexible Budget Variance Actual x Budgeted Static Budget 20,000 units 30,000 units $4.80 $4.80 $134,400 $144,000 $9,600 Favorable Sales Volume Variance (Based on Units)...
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This note was uploaded on 08/25/2010 for the course ACCT 327 taught by Professor Gillespie,j during the Spring '08 term at University of Delaware.

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10026_042810_96 - *Chapter 14*-Evaluating Performance...

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