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Allowance  The quantity of material that is expected to be lost due to normal inefficiencies or waste associated with a manufacturing process; used when setting a standard cost for a process.
(See page(s) 1400)
Budget reports  Documents that compare actual results to planned objectives.
(See page(s) 1392)
Budgetary control  The use of budgets by management to monitor and control the operations of a company.
(See page(s) 1392)
Controllable variance  Both overhead spending variances (variable and fixed), and the variable overhead efficiency variance combined together.
(See page(s) 1409)
Cost variance  The difference between the actual incurred cost and the standard amount.
(See page(s) 1402)
Efficiency variance  Efficiency variance indicates how efficiently inputs are used, and is computed as the standard price per unit times the difference between the actual quantity used and the standard quantity that should be used for actual output.
(See page(s) 1409)
Favourable variance  A deviation from the budget that contributes to a higher income.
(See page(s) 1393)
Fixed budget  A planning budget based on a single predicted amount of sales or production volume; unsuitable for evaluations if the actual volume differs from the predicted volume.
(See page(s) 1393)
Fixed budget performance report  An internal report that compares actual revenue and cost amounts with fixed budgeted amounts and identifies the differences between them as favourable or unfavourable variances.
(See page(s) 1393)
Flexible budget  A budget prepared after an operating period is complete to help managers evaluate past performance; uses fixed and variable costs in determining total costs.
(See page(s) 1394)
Flexible budget performance report  An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity); presents the differences between actual and budgeted amounts as variances.
(See page(s) 1390)
Management by exception  An analytical technique used by management to focus on the most significant variances and give less attention to areas where performance is close enough to the standard to be satisfactory.
(See page(s) 1413)
Overhead cost variance  The difference between the total overhead cost applied to products and the total overhead cost actually incurred at the end of a cost period.
(See page(s) 1408)
Price variance  A difference between actual and budgeted revenue or cost caused by the difference between the actual price per unit and the budgeted price per unit.
(See page(s) 1397)
Quantity variance  The difference between actual and budgeted revenue or cost caused by the difference between the budgeted and actual number of units sold or inputs used.
(See page(s) 1397)
Spending variance  The difference between the actual price of an overhead item and its standard price
(See page(s) 1408)
Standard costs  The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service.
(See page(s) 1399)
Unfavourable variance  A deviation from the budget that contributes to a lower income.
(See page(s) 1393)
Variance analysis  A process of examining the differences between actual and budgeted revenues or costs and describing them in terms of the amounts that resulted from price and quantity differences.
(See page(s) 1397)
Volume variance  The difference between two dollar amounts of fixed overhead cost. The first amount equals the total budgeted overhead cost. The second number is the overhead cost allocated to products using the predetermined fixed overhead rate.
(See page(s) 1409)







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