Class Notes (923,199)
CA (543,146)
UTSG (45,887)
Rotman Commerce (1,107)
RSM222H1 (35)
Lecture

Textbook Notes on Chapter 10+11-Standard Costing and Flexible Budget

2 Pages
124 Views

Department
Rotman Commerce
Course Code
RSM222H1
Professor
Jacques Bertrand

This preview shows half of the first page. Sign up to view the full 2 pages of the document.
Chapter 10
2 reasons why price and quantity standards are determined separately:
1) purchasing manager = responsible for RM purchase prices, production manager =
responsible for quantity of RM used
2) buying and using activities occur @ different times; RM purchases may be held in
LQYIRUDSHULRGRIWLPHEHIRUHEHLQJXVHGLQSURG¶Q
Mix/Yield Variance:
- used when production process requires input of more than one material (material
quantity variance ±MQV ± can be further broken down into mix/yield)
Mix ± dollar effect of a difference between the actual mix of materials and the
budgeted mix of materials on total materials cost
Yield ± portion of efficiency variance that is not the mix variance; occurs when actual
yield differs from the standard yield expected from a given mix of inputs
- production managers = responsible for labour variances; they influence:
o mix of skill levels assigned to work tasks
o level of employee motivation
o quality of production supervision
o quality of training provided to employees
Chapter 11
Static Budget ± designed for only one level of activity
Flexible Budget ± designed to cover range of activity + can be used to develop budgeted
cost at any point within that range to compare to actual costs incurred
- shows costs that should have been incurred at the actual level of activity
- reveal variances related to cost control
- improve performance evaluation
Flexible Performance Report:
- flexible budget = prepared for same activity level as actually achieved
Selecting an activity base for an OH flexible budget:
1) activity base and variable OH should be causally related
2) activity base should be simple and easily understood
3) activity base should not be expressed in dollars or other currency
If flexible budget based on:
1) Actual Hours - only SPENDING variance computed
2) Standard Hours ± SPENDING and EFFICIENCY variance computed
(***USUALLY based on units of product/# of customers served)
Spending Variance ± results from paying more or less than expected for OH items and
from excessive usage of OH items
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Chapter 10 2 reasons why price and quantity standards are determined separately: 1) purchasing manager = responsible for RM purchase prices, production manager = responsible for quantity of RM used 2) buying and using activities occur @ different times; RM purchases may be held in L3; 147,507L4419L20-01470-0L3J:80L35743 MixYield Variance: - used when production process requires input of more than one material (material quantity variance MQV can be further broken down into mixyield) Mix dollar effect of a difference between the actual mix of materials and the budgeted mix of materials on total materials cost Yield portion of efficiency variance that is not the mix variance; occurs when actual yield differs from the standard yield expected from a given mix of inputs - production managers = responsible for labour variances; they influence: o mix of skill levels assigned to work tasks o level of employee motivation o quality of production supervision o quality of training provided to employees Cha
More Less
Unlock Document


Only half of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit