ACCOUNTG 222 Final: accounting final review
Document Summary
Aq = # of roses * # of rose bouquets. Negative and positive don"t necessarily mean unfavorable and favorable respectively: if the price goes down, your number would be negative but that is favorable because then you are paying less. Ap & sp are for the cost per input, not for the cost per bouquet. Flex budget variance = aq*ap sq*sp, you can also find by netting the usage and price variances. Static budget and volume variances do not use aq ap, aq sp, sq sp: only to do with flexible budget variance. Standard/static budget: what it should cost: estimated units * standard unit cost. Flexible budget is sq * sp - what it should have cost for your actual level of production. Volume variance is the difference between flexible budget and static budget: if you produce more than you expected favorable, using more costs is unfavorable. Flexible budget variance is the difference between flexible budget and actual cost.