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How can managers use accounting information to help control manufacturing overhead costs?
Managers compare the actual line item amounts for manufacturing overhead with the budgeted amounts. Managers investigate large differences between actual and budgeted amounts to identify the reasons why actual costs differ from planned or budgeted costs.
Why are some budgeted costs based on actual costs from the previous years?
Some budgeted costs are based on actual costs of the previous year, information from supervisors about where resources might be more efficiently used, and subjective judgments about how much should be allowed for resources.
A major weakness of flexible budgets is?
they force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity.
What are budget figures based on?
Budget figures may be based on actual, budgeted, or standard costs. These categories are not mutually exclusive.
What is the difference between imputed costs and book costs?
Imputed costs do not appear in the historical cost accounting records for financial reporting. The actual cost incurred is recorder and is called a book cost.
How can managers use accounting information to help control manufacturing overhead costs?
Managers compare the actual line item amounts for manufacturing overhead with the budgeted amounts. Managers investigate large differences between actual and budgeted amounts to identify the reasons why actual costs differ from planned or budgeted costs.
Why are some budgeted costs based on actual costs from the previous years?
Some budgeted costs are based on actual costs of the previous year, information from supervisors about where resources might be more efficiently used, and subjective judgments about how much should be allowed for resources.
Why some company uses budgeted overhead costs rather than actual costs?
the reason was: control the budget,
How do you calculate production volume variance?
Production volume variance is calculated by taking the difference between the actual production volume and the budgeted production volume, then multiplying that difference by the standard fixed overhead rate per unit. The formula is: [ \text{Production Volume Variance} = (\text{Actual Units Produced} - \text{Budgeted Units}) \times \text{Standard Fixed Overhead Rate per Unit} ] This variance helps to assess how well the actual production aligns with planned production levels and the impact on fixed overhead costs.
When is volume variance nonzero?
Volume variance is nonzero when there is a difference between the actual level of production achieved and the expected or budgeted level of production. This occurs when actual sales volume deviates from the planned sales volume, leading to changes in fixed costs allocated per unit. If the actual output is greater or less than what was anticipated, the fixed costs per unit will differ, resulting in a volume variance.
A major weakness of flexible budgets is?
they force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity.
What are budget figures based on?
Budget figures may be based on actual, budgeted, or standard costs. These categories are not mutually exclusive.
How do you find the actual of a budget?
The actual are retrospective - they have occurred and have to entered in a budget document against what was budgeted so that you have the budget then actual and then you will find the difference plus or minus against budget. The date for actual comes from what has happened i.e. in a wage budget you will plan what you spent, after that period (month of the year) you will have the actual cost of the wage. The costs would be made available from the the department who make up the wages.
What is the difference between imputed costs and book costs?
Imputed costs do not appear in the historical cost accounting records for financial reporting. The actual cost incurred is recorder and is called a book cost.
Normal costing system?
A costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and that allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases.
How would you describe a budgeted cost?
Budgeted costs are generally described as the best estimate about what should be allowed for forthcoming activity.
What is the difference between over costing under costing?
Over costing means charging more costs to items than it's actual cost while under costing means charging less cost then actual costs.
