RSM222H1 Chapter Notes - Chapter 9,10: Standard Cost Accounting, Fixed Cost
Document Summary
Week 9: chapter 9/10: flexible budgets and standard. Chapter 10: standard costs and overhead analysis: management by exception: actual results for various operating activities compared to standards. Labor variance: labor rate variance: actual hours * (actual rate - standard rate) Caused by poorly trained workers, faulty materials, poor supervision, inaccurate. Insufficient/fluctuating demand can cause unfavorable variance: cannot constantly adjust workforce in response to demand standards. Variable overhead variance: variable overhead spending variance: actual hours * (actual rate - standard rate) Rsm222 page 1: how standard quantity allowed for actual output at standard price varies from actual quantity at. Price variance standard price: if time of purchase is not in same period as use. Calculate quantity variance based on production: variable overhead efficiency variance: standard rate * (actual hours - standard hours) Depends on both quantity used and purchase price of overhead items. Estimate of indirect effect on variable overhead costs of (in)efficiency in use of activity base.
