Week 5 Discussion Budgets - Therefore a company can adjust...

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A company can use the results of variance calculations to produce more accurate budgets. Variances tend to tell us the difference between a standard and the actual. For example the direct labor efficiency variance will show us the difference between how many hours it should have taken and how many labor hours it actually takes. This will indicate if a change in the standard direct labor hours used needs to be made.
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Unformatted text preview: Therefore a company can adjust their “standards” used for the next budget period and this should result in a more accurate budget. Each variance calculation can help them better predict future budgeting results and increase their accuracy in projections. Source: http://blog.accountingcoach.com/labor-efficienc-variance-standard-cost/...
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This note was uploaded on 03/26/2012 for the course AC505 AC505 taught by Professor Dillan during the Spring '10 term at Keller Graduate School of Management.

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