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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.
What must be budgeted based on an approximation of the previous month's expenses?
When budgeting based on the previous month's expenses, it's important to consider fixed costs such as rent, utilities, and salaries, as well as variable expenses like groceries, entertainment, and transportation. Additionally, setting aside funds for unexpected costs and savings goals should be included to ensure financial stability. Analyzing trends in spending can help adjust estimates for the upcoming month to better align with actual financial needs. Lastly, consider any upcoming changes or events that may impact expenses, such as holidays or planned purchases.
How would you describe a budgeted cost?
Budgeted costs are generally described as the best estimate about what should be allowed for forthcoming activity.
How do we calculate budgeted level of activity in units?
To calculate the budgeted level of activity in units, you first need to determine the total budgeted costs and the variable cost per unit. Then, divide the total budgeted costs by the variable cost per unit. Additionally, you may consider any fixed costs and the expected sales demand to ensure the budget aligns with operational goals. This process helps in setting realistic production levels for the period.
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.
