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The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget true or false?
true
What is the Difference between budget and actual expenditure?
Budget is the projected financial estimate in a given year, whilst expenditures are the actual expenses incured in carrying out the budget.
What is the ideal beverage cost formula?
Cost of Opening inventory-Cost of Closing Inventory Divided by Total Revenue, Multiply by 100. Individual Beverage cost is. Cost of beverage, divided by actual selling price.
What does Grossing renvue mean?
"Raw" sales income; the amount customers actually pay the company when they make their purchases.When a company sells products, it has to make allowances for some portion of its sales for products expected to be returned, lost in delivery, or otherwise requiring the company to refund the customers' money. The "official" revenue number, known as sales revenue, equals gross revenue minus these allowances.Gross revenue is generally not an interesting number for investors. One case where it isinteresting is when you're tracking the progress of a startup company. It's possible that at the very beginning they'll be doing such a tiny amount of business that actual sales will be less than the allowances for refunds, meaning that sales revenue will technically be a negative number. In this case the company will issue news releases about its gross revenue, so investors will at least know that a few customers have been showing up and laying out some cash.
What is meant by the terms under-absorption and over-absorption of fixed overheads how they arise and how they are calculated?
Over or Under AbsorptionNote that as long as planned level of activity and the actual level of activity is not the same there is always an Over or Under Absorption situationThis is because overhead absorption rate is set at the start of the period based upon an expected level of production and that during the period, the level of output and or overheads will be different from the planned overheads and or output.OVER-absorption occurs when the total overhead recovered or absorbed is GREATER than the actual level of overheads for the period.UNDER-absorption occurs when the total overheads recovered or absorbed is LESS than the actual overheads incurred in the period.
The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget true or false?
true
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
How do you calculate Total revenue variance?
total revenue variance = actual revenue - standard revenue Total revenue variance (AQ x AP) - (SQ x SP) where AQ is actual quantity (units of service sold), AP is actual price (actually recorded as revenue), SQ is standard quantity, and SP is standard price
What type of variance is excess usage?
Since actual usage of the direct material was greater than the standard allowed, the excess usage is called an unfavorable variance
Are unfavorable variance is recorded with a debit?
Yes, unfavorable variances are typically recorded with a debit. This is because unfavorable variances indicate that actual costs exceeded budgeted costs, leading to a reduction in profit. Recording the unfavorable variance with a debit reflects the increase in expenses or decrease in income, which is essential for accurate financial reporting and analysis.
An unfavorable material quantity variance indicates?
actual usage of materials exceeds the standard material allowed for output
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.
If the controllable overhead variance is favorable the overhead volume variance?
volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.
Will the direct labor price variance always be unfavorable if more hours are worked than the standard hours allowed for the actual output attained?
No, Direct labor price variance is created due to difference in standard labor rate and actual labor rate for example standard labor rate per unit is 10 and actual labor rate is 11 then 1 per unit is unfavourable direct labor price variance.
Which one of the following is the result of the units sold x actual selling price per unit - units sold x budgeted selling price per unit?
The result of the calculation "units sold x actual selling price per unit - units sold x budgeted selling price per unit" represents the variance in revenue due to the difference between actual and budgeted selling prices. This is known as the revenue variance, which indicates how much additional or reduced revenue was generated compared to what was expected based on the budgeted selling price. A positive result implies higher actual revenue, while a negative result indicates lower actual revenue.
What does a sales volume variance measure?
A sales volume variance measures the difference between the actual quantity of units sold and the budgeted quantity of units sold, multiplied by the standard selling price. It indicates the impact of changes in sales volume on a company's revenue and is used to assess the effectiveness of sales strategies and forecasts.
What is direct labor variance?
It means the difference between the budgeted or estimated direct labour cost at the start of work activity with the actual direct labour cost at the end of activity or fiscal year. If budgeted cost is more then the actuall then it is favourable variance otherwise it is unfavourable direct labour cost variance
