9. Revenue and Other Variances_w9.pdf - AGENDA Further...

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AF3112 - 20131AF 3112MANAGEMENT ACCOUNTING 2Standard Costing:Revenue and Other VariancesAF3112 - 20132AGENDAFurther breakdown of usage/efficiencyvarianceMix variance and yield varianceRevenue varianceSelling price variance and sales volume varianceSummary on variance analysis frameworkAF3112 - 20133Master Budget Variance (for operatingincome)Summary of VarianceAnalysisFlexible BudgetVarianceSales VolumeVarianceSelling PriceVarianceDirect MaterialVarianceDirect LaborVarianceVariable Manuf.Overhead VarianceFixed Manuf.Overhead VarianceDirect materialsprice varianceDirect materialsefficiency varianceDirect laborprice varianceDirect laborefficiency varianceActual inputQuantity*ActualPriceActual inputQuantity*StandardPriceStandard inputQuantity allowedfor actual output*StandardPriceAF3112 - 20134Yield and Mix VariancesDirect Material/Direct LaborFlexible Budget VariancePrice/Rate VarianceUsage/Efficiency VarianceMix VarianceYield VarianceAQ*APAQ*SPSQ*SPAQ*SP=AQ*AM*SPSQ*SP=SQ*SM*SPAQ*SM*SPM = Mix (in %)
AF3112 - 20135Overview on Mix & Yield VarianceAn extension ofDirect Material Usage VarianceDirect Labor Efficiency VarianceObjectiveAnalyze the effect of mixing different direct materialsor types of workers in the manufacturing processwhenmultiple inputexists, assuming that theinputs can be substituted.AF3112 - 20136Mix VarianceA variance incurred when the actual input mixis different from the standard mixYield VarianceA variance incurred when actual output (yield)different from standard output (yield)The output difference is likely due to a differentmix (of inputs) usedOverview on Mix & Yield VarianceAF3112 - 20137Example – Mix and Yield VarianceXYZ produced a product with budget as follows,60% of material input A at $200 per ton40% of material input B at $100 per ton1.6 tons of input quantities are required to produce1 ton of outputXYZ produced 300 tons of the product in aparticular period. The actual quantities of inputsused are 275 tons of input A and 225 tons of inputBAF3112 - 20138Example – Mix and Yield VarianceMix VarianceAMSMAMSMAQSPVarianceA0.550.60.055002005000 FB0.450.40.055001002500 UTotal2500 FYield VarianceAQSQ (Total)*AQSQSMSPVarianceA50048020.000.62002400 UB50048020.000.4100800 UTotal3200 UUsage VarianceSPAQSQSP x AQSP x SQVarianceA20027528855000576002600 FB10022519222500192003300 U
AF3112 - 20139Overview on Revenue VarianceObjectiveAssess the firm’s marketing effectiveness andsales performance through by determining andinvestigating the following:Change in selling priceChange in sales volumeChange in sales mix and sales quantityAF3112 - 201310Overview on Revenue VarianceRevenue/Sales VarianceSelling Price VarianceSales Volume VarianceSales Mix Variance

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Term
Spring
Professor
N/A
Tags
Direct material price variance, Master Budget Sales, Mkt

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