Variance Analysis in Budgetary Control

In the variance analysis, managers identify the reasons for the differences between the planned budget and actual ____________ of the firm.

Variance analysis is used for budgetary control to supplement further decisions that are needed to be made for the next production ____________.

The budgeted output was 1000 units with a price of £100 per unit, while the actual output was 900 units with a price of £__________ per unit.

The firm used lesser raw materials than planned which resulted in lower costs, this is an example of ____________ analysis.

The company incurred higher Fixed Overhead Cost (FOH) than budgeted, indicating a need for a closer look at the ____________ analysis.

The firm sold lesser units than planned, which could prompt a review of the ____________ analysis to understand the decrease in sales.

Jay's total fixed cost includes the cost of booth rental and __________

To calculate breakeven point, Jay needs to divide fixed costs by the difference between selling price and __________ cost

The margin of safety indicates how much output can fall before reaching the __________ point

Renting the machine reduces Jay's labor cost per basket to Php 50, leading to a change in his __________ cost structure

Expanding production by renting the machine can help Jay increase his __________

To decide whether to rent the machine for the next production cycle, Jay needs to analyze the machine's impact on his __________

There is a -300 variance in the labor rate. This means, the firm’s labor rate was £300 more costly than the ________

By knowing favorable and unfavorable variances, one can understand which cost variable (labor/materials/fixed) are helping/hurting the ________.

With all these, a manager can then know the further actions to take regarding cost ________.

90 FLEXED BUDGET - EXAMPLE Budget Output Actual Flexed budget 1000 units £100/unit £100,000 900 units £92,000 900 units x £100/unit £90,000 Raw materials 40,000 m £40,000 37,000 m £36,900 900 units x £36,000 Labour 2500 hours (Production & Sales) (40 m/unit output) (£1/ m) (40 m/unit output) x (£1/ m) £20,000 2,150 h £17,500 900 units x (2.5 hrs/unit output) £18,000 (2.5 hrs/unit output) x (£8/hr) (£8/hour) Fixed OH £20,000 £20,700 £20,000 Op profit £20,000 £16,900 £16,000. By calculating the flexed budget, one can identify the impact of changes in production levels on ________.

92 DEPARTMENTAL MIDTERM EXAM March 20, 2024 (1:15-4:15). By analyzing the departmental midterm exam results, managers can make informed decisions about ________.