Flexible budget Budgeted pricescosts at Budgeted pricescosts Actual prices

Flexible budget budgeted pricescosts at budgeted

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Flexible budget : Budgeted prices/costs at Budgeted prices/costs Actual prices/ budgeted volume at actual volume costs at actual volume
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SQ = 20 pounds per washing machine * 80 = 1,600 pounds SP = 5 EU AQ = 1,700 pounds AP = 6,630 / 80 = 3,90 EU ** Use updated slides to update ** What could be reason for favorable material price variance and unfavorable material efficiency variance? - Substandard quality of material caused waste in production process; - Tension between production and purchasing manager. What could be a reason for unfavorable labor price variance and favorable labor efficiency variance? - ***
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SQ * SP = little block Do you notice something in this graph? Keep in mind; for the PV and EV we hold different managers accountable for. Purchasing manager held responsible for (AQ-SQ) *(AP- SP); For the little green square, the purchasing manager is held responsible for this. But same time the person who causes this, is the production manager. *See updated slide When AQ will go up (production manager); price variance will increase (purchasing manager). So why hold purchasing manager accountable for production waste? Can purchaser manager influence the efficiency of the production process? Quality of the material purchased is important int his. The underlying reasons is that purchasing manager can affect the quality of the purchased material. From a performance evaluation managers perspective; keep green part totally out (teacher says this in lecture).
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  • Fall '16
  • Perego
  • United Kingdom budget, purchasing manager

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