Buscar
Estás en modo de exploración. debe iniciar sesión para usar MEMORY

   Inicia sesión para empezar

level: Level 1 of Chapter 6: Variance analysis

Questions and Answers List

level questions: Level 1 of Chapter 6: Variance analysis

QuestionAnswer
What is variance analysisVariance analysis is an analysis of differences between the budget and actual results. This evaluates effectiveness, efficiency and the manger himself.
Are variances expected?Yes. Fluctuations will always happen between the budgeted and actual amount.
What does U and F mean in variance analysis?U means the variance is unfavourable for the firm. F means the variance is favourable for the firm.
What does the level 0 variance analysis contain?The level 0 variance analysis only looks at the operating profit.
What does the level 1 variance analysis contain?The level 1 analysis looks at the variance between the actual results and the static budget.
What does the level 2 variance analysis contain?The level 2 analysis splits the static budget variance into the flexible budget variance and the sales volume variance.
What does the level 3 variance analysis contain?The level 3 analysis looks at the direct material costs.
What does the price and efficiency variance from level 3 variance analysis show?Price variance Shows the differences between actual and budgeted input prices. Efficiency variance Shows the difference between actual and budgeted input. Formula:
What is 4-variance analysis? (Also known as three-way variance analysis)This analysis tries to explain the variance in manufacturing overhead with a spending, efficiency and production volume variance.