Budgeted moh rate total moh coststotal manufacturing

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Budgeted MOH Rate: Total MOH costs/Total Manufacturing Hours. Budgeted MOH cost per output unit: Total MOH costs/units to be produced. o Budgeted income statement: Revenues – COGS = Gross Margin – Operating Costs (Variable & Fixed) = Operating Income.
Chapter 7 Favorable vs. unfavorable variances (C & P) o Favorable Variance: Actual Cost < Budgeted Cost; Actual Revenue > Budgeted Revenue. o Unfavorable Variance: Actual Costs > Budgeted Costs; Actual Revenue < Budgeted Revenue. Master/Static budget vs. flexible budget (C): o A static budget, or master budget, is based on planned output and is prepared at the start of the budget period. o A flexible budget adjusts the master budget using actual output to recalculate revenue and variable costs for the budget period. This allows management to compare actual results with budgeted results for actual activity level. Flexible budgets accommodate changes in activity levels. o The three-step process for developing the flexible budget is as follows: Identify the actual output quantity. Calculate flexible budget revenues (budgeted selling price  actual quantity). Calculate flexible budget costs (budgeted per-unit variable cost  actual quantity plus fixed costs). Prepare a static budget and flexible budget (P)
Static-budget variance, sales-volume variance, and flexible-budget variance: each item and total amount (C & P) o A static-budget variance, then, is the difference between actual results and the budgeted amounts in the static budget. o The sales-volume variance is the difference between the flexible budget (at actual output) and the corresponding static budget amount. o The flexible-budget variance is the difference between actual revenues or costs and the corresponding flexible budget amounts. The flexible-budget variance for revenues is called the selling price variance as it arises only from the difference between the actual selling price and the budgeted selling price.

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