Chapter 9 - Flexible Budgets, Standard Costs, and Variance Analysis

These flashcards cover key concepts related to flexible budgets, standard costs, and variance analysis as outlined in Chapter 9.

Flexible Budget

A budget that adjusts based on the actual activity level, using budgeted formulas.

Revenue Variance

The difference between actual revenue and flexible budget revenue.

Spending Variance

The difference between actual costs and flexible budget costs for expenses.

Unfavorable (U) Variance

A variance that indicates that revenue is less than expected or expenses are more than expected.

Favorable (F) Variance

A variance that indicates that revenue is greater than expected or expenses are less than expected.

Direct Materials (DM) Price Variance

The difference between the actual price paid for materials and the expected price.

Direct Materials (DM) Quantity Variance

The difference between the actual quantity of materials used and the standard quantity expected to be used.

Direct Labor (DL) Rate Variance

The difference between the actual rate paid to labor and the standard rate.

Direct Labor (DL) Efficiency Variance

The difference between the actual hours worked and the standard hours expected to be worked.

Variable Manufacturing Overhead (MOH) Rate Variance

The difference between the actual overhead rate and the standard overhead rate.

Variable Manufacturing Overhead (MOH) Efficiency Variance

The difference between the actual allocation base used and the standard allocation base.