ACC 117 Lecture 22: ACC 117 Lecture 22

20 views3 pages

tealmammoth179

24 Jul 2020

School

Tunxis Community College

Department

Accounting

Course

ACC 117

Professor

Muccino

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Variance analysis cycle- evaluate and improve performance. Planning budget- prepared before the period begins and is valid for only the planned. Flexible budgets- take into account how changes in activity affect costs; estimate of what revenues and costs should have been, given the actual level of activity for the period. Activity variances- differences between the flexible budget and the planning. Revenue variance- difference between the actual total revenue and what the total revenue should have been given the actual level of activity for the period. Actual revenue > planned revenue = favorable. Actual revenue < planned revenue = unfavorable. Spending variance- difference between the actual amount of the cost and how much the cost should have been, given the actual level of activity. Actual cost > planned cost = unfavorable. Actual cost < planned cost = favorable variances produce one unit of finished goods materials and it should reflect the final, delivered cost of those materials.

Related Questions

An activity variance is a difference between an actual revenue or cost and the revenue or cost in the flexible budget that is adjusted for the actual level of activity of the period. TRUE OR FALSE?

orangewoodchuck112

The flexible-budget variance measures

Select one:

a. [expected expenditures for the actual number of outputs] + [the actual expenditures for the actual number of outputs].

b. what the costs and revenues should have been for the budgeted number of outputs.

c. [actual cost for the actual level of the revenue or cost driver] - [budget unit amount Ã the actual level of the revenue or cost driver].

d. the difference between budgeted and actual variable costs.

Vanderhyde Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During May, the kennel budgeted for 3,300 tenant-days, but its actual level of activity was 3,340 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for May:

Data used in budgeting:
	Fixed element per month	Variable element per tenant day
Revenue		$36.00

Wages & Salaries	$3,500	$7.20
Foods & Supplies	$1,500	$13.30
Facility Expenses	$9,500	$4.70
Administrative Expenses	$6,800	$0.40
Total Expenses	$21,300	$25.60

Actual results for the month were:

Revenue	$124,830

Wages & Supplies	$28,818
Foods & Supplies	$44,652
Facility Expenses	$24,218
Administrative Expenses	$7,886
Total Expenses	$105,574