its market position. Standard costs are established and revised each period during the budgeting process. Standard costs are continually reviewed and periodically revised if significant changes occur in production methods or in the prices paid for material‚ labor‚ and overhead. The level of production output plays an important role in determining cost standards. For instance‚ grossly underutilized production facilities often experience varying degrees of cost inefficiency. Conversely‚ the stress and
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for the year ended June 30‚ 1998 presented the actual values generated together with the master (static) budget and master budget variances for the period. The company obtained higher Total Revenue than their budget but it turned out to an Operating Loss near a million dollars. This paper aims to study the budgets from actual results‚ and to compute the budget variances and to analyze its causes. After that‚ the company performance will be evaluated to recommend alternative solutions for improvement
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uses standards for cost and revenue for the purpose of control through variance analysis. We can say standard costing is a technique of costing‚ which also established control over costing. Standard cost can be defined “As a pre-determined cost which is calculated from management’s standard of efficient operation and relevant necessary expenditure. It may be used as a basis for price fixing and for control through variance analysis.” Hence we can say standard costs are pre-determined estimates
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of the variance arising 10 4. Write a brief note outlining the advantages and disadvantages 13 of using variance analysis as a means of controlling a business Question 1. Calculation of Standard Cost per unit for each of the products. Part 1 : Standard Cost of Deluxe Model : ₤430.20/unit Working : Deluxe Model Glass Wood Direct Material/unit 102.40 179.00 Skilled Unskilled Direct Labor 105.60 43.20 Total Per Unit Direct Material
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Chapter 6: Master Budget and Responsibility Accounting A budget is the quantitive expression of a proposed plan of action by management for a specified period Also to aid to coordinate what needs to be done to implement that plan A financial budget quantifies managers’ expectations regarding a company’s income‚ cash flows‚ and financial position Strategy specifies how an organization matches it capabilities with the opportunities in the marketplace to accomplish its objectives Stratigic plans are
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www.eduwithsugeeth.com Lesson Mock 04: Specimen Answer Standard Costing 01. (a) The average variable cost per unit falls as volume increases from 5‚000 to 15‚000 units and then increases as volume increases to 30‚000 units. The average material costs may initially fall because of economies of scale due to bulk discounts‚ but then may rise if there is scarcity of supply‚ requiring a premium to be paid. The product-specific fixed costs are constant until the volume increases from 10‚000 to
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Introduction Danshui Plant No.2 is a contract manufacturer locating in southern China and was assembles electronic products for companies wishing to save labor costs and they are using semiskilled labor for less than 1 dollar an hour. In August 2010‚ Danshui Plant No.2 in southern China has a 1 year contract in the period between 1 June 2010 and 31 May 2011 with Apple incorporation to assemble the Apple iPhone 4. Based on the contract‚ Danshui need to assemble 2.4 million iPhones within 1 year.
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the budgets listed in Column A: 1. Budgeted income statement a. Direct materials budget 2. Budgeted balance sheet b. Cost of goods sold budget 3. Cash flow budget c. Production budget 4. Cost of goods sold budget d. Payables budget 5. Production budget e. Sales budget 6. f. Budgeted income statement 1. Budgeted income statement – e. Sales budget 2. Budgeted balance sheet – d. Payables budget 3. Cash flow budget – a. Direct materials budget 4. Cost of goods sold budget – b. Cost of goods sold budget
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2 Discussion 2 Costing method & purpose of variance analysis 2 Key findings 3 Material price variance 3 Material usage variance 3 Labour rate variance 4 Labour efficiency variance 5 Variable overhead variance 5 Fixed overhead expenditure variance 6 Fixed overhead volume variance 6 Variable selling and distribution variance 6 Sales variance 7 Responding to publicity 7 Conclusion 8 Appendix 1: Key findings of variance analysis 9 Appendix 2: Profit Magin‚ Mark-up and
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- Break even sales volume Profit or loss at Rs. 46 lakh sales Sales to earn a profit of Rs. 5 lakh. (b) Calculate Direct Material Cost Variances Direct Material usage variance and Direct Material Price Variance from the following information : Finished production during the period 1000 units Opening Stock of material 1000 kg. Closing Stock of material 2000 kg.
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