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What is the meaning of fixed overhead total variances in an absorption costing system?
Fixed overhead variance means actual fixed overhead cost was more than it was actually budgeted before start of operations.
An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period true or false?
False
List of causes of unfavorable direct material price variance?
1.rise in price. if price will be higher than the budgeted price then unfavourable 2.shortage of suppliers. this led to increase in price
What is the definition of over budget?
Spending more than planned (Budgeted for) for a specific purpose.
A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget true or false?
True
What is favourable?
A favorable variance is the difference between the budgeted or standard cost and the actual cost. If the actual cost is less than budgeted or standard cost, it is a favorable variance.
What is favourable variance?
A favorable variance is the difference between the budgeted or standard cost and the actual cost. If the actual cost is less than budgeted or standard cost, it is a favorable variance.
How do you calculate the achievement when a loss is budgeted and actual loss is more than that?
To calculate the achievement when the actual loss exceeds the budgeted loss, you first determine the difference between the budgeted loss and the actual loss. If the actual loss is greater, it indicates a negative variance. The achievement can be expressed as a percentage of the budgeted loss, using the formula: Achievement = (Budgeted Loss - Actual Loss) / Budgeted Loss * 100. In this case, the achievement percentage would reflect a shortfall rather than a success.
What is the meaning of fixed overhead total variances in an absorption costing system?
Fixed overhead variance means actual fixed overhead cost was more than it was actually budgeted before start of operations.
Difference between budgeting and forecasting in cost accounts?
Budgeted cost compares with actual cost and then we try to reduce if cost is more than budgeted cost Forcasting is just estimation of future cost . They may use or not . These forecasted cost is just direction for future cost but practically only budgeting concept is more relevant regarding cost accounts .
What causes a favorable budget variance?
A favorable budget variance occurs when actual revenues exceed budgeted revenues or actual expenses are less than budgeted expenses. This can result from higher-than-expected sales, cost-saving measures, efficient resource management, or unexpected income sources. Additionally, accurate forecasting and effective financial planning can contribute to achieving a favorable variance. Overall, it reflects better financial performance than anticipated.
A favorable fixed overhead volume variance occurs if?
Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.
Why some company uses budgeted overhead costs rather than actual costs?
the reason was: control the budget,
What is cost price variances?
Price variance is the actual unit cost minus the standard unit cost, multiplied by the actual quantity purchased. The variance is said to be unfavorable if the actual price of the materials is higher than the standard price of the materials.
What is favorable and unfavorable budget variance?
A favorable budget variance occurs when actual financial performance exceeds budgeted expectations, typically leading to higher revenues or lower expenses than planned. Conversely, an unfavorable budget variance arises when actual performance falls short of budgeted projections, resulting in lower revenues or higher expenses. Both types of variances are important for financial analysis, as they help organizations assess their operational efficiency and make necessary adjustments for future budgeting. Understanding these variances aids in strategic decision-making and resource allocation.
An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period true or false?
False
What is a positive or negative variance of a budget?
A variance is the difference between the projected budget and the actual performance for a particular account. A negative variance means that the budgeted amount was greater than the actual amount spent. A positive variance means that the budgeted amount was less than the actual amount spent. Note there is some debate over whether a negative variance means an underrun or an overrun. The Project Management Institute, however, endorses the accepted convention that a negative variance is a bad thing, and a positive variance a good thing.
