ACCT 346 Week 6 Threaded Discussion - Variances

ACCT 346 Week 6 Threaded Discussion - Variances - ACCT 346...

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ACCT 346 Managerial Accounting - Week 6 Threaded Discussion - Variances Post #1: What are the six variances discussed in this chapter? Post #2: Select and define one, and provide an example (with numbers). POST# 1 Material Price Variance Material Quantity Variance Labor Rate Variance Labor Efficiency Variance Controllable Overhead Variance Overhead Volume Variance POST# 2 Overhead volume variance is the difference between the overhead costs in a manufacturing company’s flexible budget for its achieved level of production, and the overhead cost applied to that production, using the standard (variable and fixed) overhead rates. This variance is solely the result of producing a different number of units than was planned for in the budget and does not necessarily mean that expenditure is being mismanaged or in good order. It is simply that the factory turned out more or less units than expected when the standard overhead rate was obtained. If production yields more units than expected, the overhead applied to inventory surpasses the flexible budget because the fixed cost per unit is spread out among more units.
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