ACCT EXAM 3 PITCHFORK

AP

Actual Price Paid per Unit

AQ

Actual Quantity Used per Unit

AV

Actual Volume of Units Produced/Sold

AQ x AV

Total Actual Quantity Used to Produce the Actual Units

SP

Budgeted Price per Unit

SQ

Budgeted Quantity Used per Unit

BV

Budgeted Volume of Units Produced/Sold

SP x SQ

Standard Cost per Unit

Actual Equation

AP x AQ x AV

Hybrid Equation

SP x AQ x AV

Flexible Equation

SP x SQ x AV

Master Budget Equation

SP x SQ x BV

Price Variance

Actual vs. Hybrid

Quantity Variance

Hybrid vs. Flexible

Sales Volume Variance

Flexible vs. Master

Flexible Budget Variance

Actual vs. Flexible

Static Budget Variance

Actual vs. Hybrid

Direct Materials PRICE Variance

Difference between how much direct materials actually cost per unit (AP) and how much direct materials should have cost per unit (SP)

Direct Materials QUANTITY Variance

Difference between how many units of direct materials we actually used (AQ) and how many units of direct materials we should have used (SQ)

Direct Labor Rate Variance

Difference between the rate we actually paid per direct labor hour (AP) and the standard rate we planned on paying per direct labor hour (SP)

Direct Labor EFFICIENCY Variance

Difference between how many direct labor hours we actually used (AQ) and how many direct labor hours we should have used (SQ)

Favorable Variance

A variance that increases profit or indicates better-than-budgeted performance

Unfavorable Variance

A variance that decreases profit or indicates worse-than-budgeted performance