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What is the difference between actual costs and budgeted costs?
Actual Costs are costs which have occurred and can be reliably measured. Budgeted Costs are costs which have been estimated, possibly by using Forecasted Costs.
What are budget figures based on?
Budget figures may be based on actual, budgeted, or standard costs. These categories are not mutually exclusive.
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.
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.
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 is the difference between actual costs and budgeted costs?
Actual Costs are costs which have occurred and can be reliably measured. Budgeted Costs are costs which have been estimated, possibly by using Forecasted Costs.
What are budget figures based on?
Budget figures may be based on actual, budgeted, or standard costs. These categories are not mutually exclusive.
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 some company uses budgeted overhead costs rather than actual costs?
the reason was: control the budget,
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.
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.
How would you describe a budgeted cost?
Budgeted costs are generally described as the best estimate about what should be allowed for forthcoming activity.
Budgeted overhead costs?
This question doesn't make sense. Please clarify.
How do you calculate the cost of a unit using actual costing?
Actual costing uses the the actual costs incurred to calculate cost per unit. All you need is the actual costs and the number of units produced/manufactured, divide the two and you will have your actual cost per unit. The same process for overhead allocation as well. The actual overhead costs are allocated on a rate that is based on actual costs. Actual costing is a delayed analysis.
How do you compute predetermined overhead rate as a percentage of direct labor costs and direct labor hours?
Predetermined overhead rate based on direct labor cost = Budgeted overhead cost / direct labor cost / 100 Predetermined overhead rate based on direct labor cost = budgeted overhead cost / direct labor hours.
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.
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.
