ACIS 2116 Chapter 11 Part 1 Slides with blanks Spring 2008

ACIS 2116 Chapter 11 Part 1 Slides with blanks Spring 2008...

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1 Variance Analysis–A Tool for Cost Control and Performance Evaluation ACIS 2116 Chapter 11 – Part 1
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2 Variance Analysis Control Tool Compare Actual to _______
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3 Management by Exception Investigate “material” or ________ differences
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4 Standards Benchmarks or “norms” for measuring ___________. Two types are commonly used.
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5 Quantity Standards Specify how much of an _____ should be used to make a product or provide a service. Examples: An auto service will set standards for how long (labor time) work tasks should take. A fast-food outlet will set standards for how much meat is used in a hamburger.
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6 Cost (price) Standards Specify how much should be ____ for each unit of input. Examples: A construction company will set standards for how much is paid to sub-contractors (framers, roofers, electricians, etc.) Hospitals have standards cost for food, medicine, and medical supplies.
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7 Employees who are ___________ about the production process Who Sets Standard Costs?
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8 Standards should be designed to encourage _______ future operations. Setting Standard Costs
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9 Ideal Standards Require employees to work at ____ percent peak efficiency. Do not allow for work _________. Difficult to attain.
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10 Practical Standards Can be attained through reasonable and _______ effort. Allow for normal machine downtime and employee rest periods.
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11 Direct Material Standards Price Standards Final, delivered ____ of materials, net of discounts.
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12 Direct Material Standards Amount of material _______ for each unit of product. Quantity Standards Includes an allowance for unavoidable waste and spoilage.
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13 Direct Labor Standards Rate Standards Can be determined by wage _______ of rates paid in similar companies. One rate is often used for all employees within a department. This rate reflects the ___ of wages earned. Includes wages earned and other employee benefits.
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14 Direct Labor Standards Time Standards Can be determined by using time and motion studies. Reflects labor hours required to ________ one unit of product.
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15 A budget is set for _____ costs. Are Standards the same as Budgets? A standard is a per ____ cost. Standards are often used when preparing budgets.
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16 Flexible Budgeting Can be used with standard costs to analyze difference in _____ and flexible budget Sales Volume Variance
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17 Sales Volume Variance Difference in ____ and flexible budget results from difference in budgeted and actual production and sales Sales Volume Variance =  (Actual – Budgeted Sales Volume) X (Budgeted Contribution Margin Per Unit)
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ACIS 2116 Chapter 11 Part 1 Slides with blanks Spring 2008...

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