ACC 406 Chapter Notes - Chapter 11: Direct Labor Cost, Variable Cost, Stabilisation Force In Bosnia And Herzegovina

• School: Ryerson University
• Department: Accounting
• Course: ACC 406
• Professor: Maurizio Di Maio

Document Summary

Flexible budget: enables a firm to compete expected costs for a range of activity levels: two types, before the fact: allows managers to see the expected outcomes for a range of activity levels scenarios, used to generate financial results for a number of plausible, after the fact: created for the actual level of activity, used to compute what costs should have been for the actual level of activity. 2) total overhead variance: difference between applied and actual overhead: broken down into, total variable overhead variance, variable overhead spending variance, variable overhead efficiency variance, total fixed overhead variance, fixed overhead spending variance, fixed overhead volume variance. Applied costs = (sh * svor) a) variable overhead spending variance: measures the aggregate effect of the differences between avor and svor: formula: (avor svor)*ah b) variable overhead efficiency variance: measures the change in variable overhead consumption that occurs because of efficient (or inefficient) use of direct labor, formula: (ah sh)*svor.