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ACCTG 311 notes - 2 Select cost-allocation base 3 Identify...

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Variance =Budgeted-actual result   Op Inc> expected = favorable Static-planned level of output at start of period Flexible- budgeted revenues and cost based on  actual level of input Variance  * Actual  Quantity Effectiveness- degree which Predtr obj or target is  met Efficiency- relative amt of input used for level of  output End-of-Pd Adj- variance accts to COGS/ prorate Investigate all variances exceeding $10,000 or  25% of expected cost, whichever is lower. Standard Costing Session 8-p.11 Direct Cost Cost Object= Standard cost/input  unit*Standard input allowed for one output unit Developing Budgeted Variable overhead allocation  rate: 1. Choose period to be used for budget. 
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Unformatted text preview: 2. Select cost-allocation base 3. Identify variable overhead costs 4. Compute the rate per unit of each cost-alloc base Developing Budgeted fixed overhead allocation rates: 1. Choose Time period (there is no flexing of FMOH) 2. Select cost-allocation base (there is no sales-vol var) 3. Identify FOHC (there is no efficiency variance) 4. Compute the rate per unit of each cost-alloc base Interpreting production-volume variance Mgmt may have maintained some extra capacity Production volume variance focuses only on costs 4: VMOHyyn,FMOHyny;Spending;Efficiency;Prod-vol 3: Tot MOH; Spending; Efficiency; Prod-vol 2: Tot MOH; Flex-budget; prod-volume 1: Tot MOH; tot OH variance...
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