1. Formulas for Fixed and Flexible Budgets, Standard Costing

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Last updated 3:38 AM on 5/14/26
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5 Terms

1
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Total budgeted costs (flexible budget equation)

Total fixed costs + (total variable cost per unit x units of activity)

2
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Actual Cost (AC)

Actual quantity x Actual price

AQ x AP

3
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Standard Cost (SC)

Standard quantity x Standard price

SQ x SP

4
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Cost variance

Actual cost - Budgeted (standard) cost

(AQ x AP) - (SQ x SP)

5
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Cost variance (alt formula)

Price Variance + Quantity Variance (need to take into account favorable or unfavorable)

- For example 16,600 favorable + -18,000 unfavorable = 16,600 - 18,000 = -1,400 = 1,400 unfavorable.