Q: What are budget variances?

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total master-budget variances

Adverse variances means unfavourable variance which is actual expenses are more than budgted variance.

Overhead Variances 13-48 pg 62213-48 Overhead VariancesStudy Appendix 13. Consider the following data for the Rivera Company:Factory OverheadFixed VariableActual incurred $14,200 $13,300Budget for standard hours allowedfor output achieved 12,500 11,000Applied 11,600 11,000Budget for actual hours of input 12,500 11,400From the above information, fill in the blanks below. Be sure to mark your variances F for favorableand U for unfavorable.a. Flexible-budget variance $______ Fixed $______Variable $______b. Production-volume variance $______ Fixed $______Variable $______c. Spending variance $______ Fixed $______Variable $______d. Efficiency variance $______ Fixed $______Variable $______

There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance

Budgeted variance analysis is very helpful in controlling the cost and expenditure of products and also helpful in determining the variation in the production expenditure with budgeted expenditure and help to eliminate variances in future and make better budgets.

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total master-budget variances

Comparing actual result to that of the budget so as to correct significant variances

Direct labor budget utilized to compare the actual direct labor cost and standard cost for specific task and for controlling purpose so that if there are variances those variances could be eliminated to bring the actual cost to budgeted cost.

Here are the differences between the two: Flexible Budget-A flexible budget is a budget that adjusts or flexes for changes in the volume of activity. The flexible budget is more sophisticated and useful than a static budget, which remains at one amount regardless of the volume of activity. Rolling Budget-Method in which a budget established at the beginning of an accounting period is continually amended to reflect variances that arise due to changing circumstances. Hope this helps!

should all variances be investigated

Using a Budget to Evaluate PerformanceSo, what happens when the period's over? At period end, it's time to determine whether we fell in line with our planned expenditures. That's when a flexible budget is used. A flexible budget is a budget with figures that are based on actual output. It's then compared to a company's static budget to get variances (differences) between what level of spending was expected and what actually occurred.With a flexible budget, budgeted dollar values (i.e. costs or selling prices) are multiplied by actual units to determine what particular number will be given to a level of output or sales. This yields the total variable costs involved in production. The second component of the flexible budget is the fixed cost. Typically, the fixed cost does not differ between the static and flexible budgets.There are tons of variances that can arise in the static budgeting system. The two most basic variances are the flexible budget variance and sales-volume variance. The flexible budget variance compares the flexible budget to actual results to determine the effects that prices or costs have had on operations. The sales volume variance compares the flexible budget to the static budget to determine the effect that a company's level of activity had on its operations. From these two budgets, a company can develop individual flexible and static budgets for any element of its operations. For example, the static budget variance is the difference between the static budget and the company's actual results. The variances are always classified as either favorable or unfavorable.If sales volume variance is unfavorable (flexible budget is less than static budget), the company's sales (or production with a production volume variance) will turn out to be less than anticipated. If, however, the flexible budget variance was unfavorable (the variance effects eventual cash flows negatively) this would be a result of price or cost. By knowing where the company is falling short or exceeding the mark, managers can do a better job of evaluating the company's performance and use the information to make changes to fu

An F-test can be used for variances.

Adverse variances means unfavourable variance which is actual expenses are more than budgted variance.

Overhead Variances 13-48 pg 62213-48 Overhead VariancesStudy Appendix 13. Consider the following data for the Rivera Company:Factory OverheadFixed VariableActual incurred $14,200 $13,300Budget for standard hours allowedfor output achieved 12,500 11,000Applied 11,600 11,000Budget for actual hours of input 12,500 11,400From the above information, fill in the blanks below. Be sure to mark your variances F for favorableand U for unfavorable.a. Flexible-budget variance $______ Fixed $______Variable $______b. Production-volume variance $______ Fixed $______Variable $______c. Spending variance $______ Fixed $______Variable $______d. Efficiency variance $______ Fixed $______Variable $______

There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance

Budgeted variance analysis is very helpful in controlling the cost and expenditure of products and also helpful in determining the variation in the production expenditure with budgeted expenditure and help to eliminate variances in future and make better budgets.

Equal variances, independent observations and normality