第11章方差分析

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Contents

Topic1Variancesindicators

Topic2Operatingstatement

Ch11Varianceanalysis

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Topic1Variancesindicators

Avarianceisthedifferencebetweenaplanned,budgeted,orstandardcostandtheactualcostincurred.Thesamecomparisonsmaybemadeforrevenues.

Whenactualresultsarebetterthanexpectedresults,wehaveafavourablevariance.

Whenactualresultsareworsethanexpectedresults,wehaveanadversevariance.

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Contents

Topic1Variancesindicators

Topic2Operatingstatement

1.Directmaterialtotalvariance

Directmaterialtotalusagevariance

(Actualusageofactualoutput–budgetedusageofactualoutput)xstandardcostperunitofmaterial

DirectmaterialtotalpricevarianceActualcostofactualusage–standardpricexactualusage

DirectmaterialtotalvarianceActualcostofactualnumberofunitproduced–flexiblebudget

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Topic1Variancesindicators

Avarianceisthedifferencebetweenaplanned,budgeted,orstandardcostandtheactualcostincurred.Thesamecomparisonsmaybemadeforrevenues.

Whenactualresultsarebetterthanexpectedresults,wehaveafavourablevariance.

Whenactualresultsareworsethanexpectedresults,wehaveanadversevariance.

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Price

Actualprice

n

Pricevariance

StandardQuantity

×StandardPrice

Quavaria

titynce

Quantity

1.Directmaterialtotalvariance

Directmaterialtotalusagevariance

(Actualusageofactualoutput–budgetedusageofactualoutput)xstandardcostper

unitofmaterial

DirectmaterialtotalpricevarianceActualcostofactualusage–standardpricexactualusage

DirectmaterialtotalvarianceActualcostofactualnumberofunitproduced–flexiblebudget

Actualquantity

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Price

Actualprice

Pricevariance

StandardQuantity

×StandardPrice

Quavaria

ntitynce

Quantity

Actualquantity

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Example

Actualoutput

Materialusage(kg/unit)

Materialprice(￥/kg)

actual

standard

actual

standard

1000

11.7

10

8.43

10

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Example

Actualoutput

Materialusage(kg/unit)

Materialprice(￥/kg)

actual

standard

actual

standard

1000

11.7

10

8.43

10

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Thetotalvariance

Output

Materialusage

Materialprice

Cost

Actual1000

Standardusage10000kg

Standardprice10/kg

100000

Standard

cost

Actual1000

Actualusage11700kg

Actualprice8.43/kg

98600

Actualcost

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Thetotalvariance

Output

Materialusage

Materialprice

Cost

Actual1000

Standardusage10000kg

Standardprice10/kg

100000

Standard

cost

Actual1000

Actualusage11700kg

Actualprice8.43/kg

98600

Actualcost

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Theusagevariance

Output

Materialusage

Materialprice

Cost

Actual1000

Standardusage10000kg

Standardprice10/kg

100000

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Theusagevariance

Output

Materialusage

Materialprice

Cost

Actual1000

Standardusage10000kg

Standardprice10/kg

100000

Actual1000

Actualusage11700kg

Standardprice10/kg

117000

Actual1000

Actualusage11700kg

Standardprice10/kg

117000

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Thepricevariance

Output

Materialusage

Materialprice

Cost

Actual1000

Actualusage11700kg

Standardprice10/kg

117000

Actual1000

Actualusage11700kg

Actualprice8.43/kg

98600

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Thepricevariance

Output

Materialusage

Materialprice

Cost

Actual1000

Actualusage11700kg

Standardprice10/kg

117000

DirectmaterialtotalpricevarianceActualcostofactualusage–standardpricexactualusage

DirectmaterialtotalvarianceActualcostofactualnumberofunitproduced–flexiblebudget

Directmaterialyieldvariance

(Actualusageinstd.mix–Std.usageinstd.mix)xstandardcostperunitofmaterial

Directmaterialmixvariance

(Actualusageinactualmix–Actualusageinstd.mix)xstandardcostperunitofmaterial

Directmaterialtotalusagevariance

(Actualusageofactualoutput–budgeted

usageofactualoutput)xstandardcostper

unitofmaterial

Directmaterialtotalvariance

Ifmorethantwomaterialsareusedtoproduceonefinishedgoods

Actual1000

Actualusage11700kg

Actualprice

8.43/kg

98600

LectureExample1

Bang

Flash

ACompanyManufacturesachemicalDynamite,usingFlash&Bang.

Dynamite:80

units

5%returns

10%Normallosses

Standardmaterialsusageandcostof1unitofDynamiteareasfollows:

For1unitofDynamitebudgeted

For1unitofDynamitebudgeted

Actualusage

Actualcost

Flash

5kg@$2perkg

$10

500kg

$1,200

Bang

10kg@$3perkg

$30

730kg

$2,200

$40

1,230kg

$3,200

ActualoutputofDynamite:80units

Normalloss:10%ofmaterialinputs

Returns:5%ofDynamite

Directmaterialtotalvariance

Ifmorethantwomaterialsareusedtoproduceonefinishedgoods

What’rethetotalmaterialinputsactuallyrequiredif

takingaccountofnormallossesandreturn?

Byallowingforthe5%return:

Todeliver80unitsofDynamite,weneedtoproduce:

80unitsx100%/(100%-5%)=84units

Byallowingforthe10%normallosses:

Thematerialinputsshouldbe:

Flash:84unitsx5kgperunitx(100%/(100%-10%)=467kg

Bang:84unitsx10kgperunitx(100%/(100%-10%)=

933kg

LectureExample1

Bang

Flash

ACompanyManufacturesachemicalDynamite,usingFlash&Bang.

Dynamite:80units

5%returns

10%Normallosses

Standardmaterialsusageandcostof1unitofDynamiteareasfollows:

For1unitofDynamitebudgeted

For1unitofDynamitebudgeted

Actualusage

Actualcost

Flash

5kg@$2perkg

$10

500kg

$1,200

Bang

10kg@$3perkg

$30

730kg

$2,200

$40

1,230kg

$3,200

Totalmaterialcostvariance

Todeliver80unitsofDynamitetocustomer

Adjustthebudgetedusageandcostofthematerialinputs

Budgeted

/std.

usage

Std.costperunitofmaterial

Budgeted

/std.cost

Actual

usage

Actual

cost

Flash

467kg

$2perkg

$934

500kg

$1,200

Bang

933kg

$3perkg

$2799

730kg

$2,200

Total

1400kg

$3733

1230kg

$3,400

Mix:1:2

Totalvariance=$333(F)

ActualoutputofDynamite:80units

Normalloss:10%ofmaterialinputs

Returns:5%ofDynamite

Materialpricevariance

Actualcostofactualusage–standardpricexactualusage

Actualcost

Standardcostx

actualusage

Std.costof

actualusage

Variance

Flash

$1,200

$2perkgx500kg

$1,000

$200(A)

Bang

$2,200

$3perkgx730kg

$2,190

$10(A)

Total

$3,400

$3290

$210(A)

What’rethetotalmaterialinputsactuallyrequiredif

takingaccountofnormallossesandreturn?

Byallowingforthe5%return:

Todeliver80unitsofDynamite,weneedtoproduce:

80unitsx100%/(100%-5%)=84units

Byallowingforthe10%normallosses:

Thematerialinputsshouldbe:

Flash:84unitsx5kgperunitx(100%/(100%-10%)=467kg

Bang:84unitsx10kgperunitx(100%/(100%-10%)=

Materialtotalusagevariance

(Actualusageofactualoutput–budgetedusageofactualoutput)xstandardcostperunitofmaterial

Actualusageof

actualoutput

Std.usageofactual

output

Standardcostperunitofmaterial

Variance

Flash

500kg

467kg

$2kg

$66(A)

Bang

730kg

933kg

$3kg

$609(F)

Total

1230kg

1400kg

$543(F)

Mix:

1:1.46

Mix:1:2

933kg

Whatshouldhavebeentheactualtotalusage

ofthematerialinputsinthestd.mix?

Units(kg)

Totalusageofmaterialinputs(500+730)

1,230

Standardmixofactualusage

1/3Flash

1230x1/3=410

2/3Bang

1230x2/3=820

Total

1230

Totalmaterialcostvariance

Todeliver80unitsofDynamitetocustomer

Adjustthebudgetedusageandcostofthematerialinputs

Budgeted

/std.usage

Std.costperunitofmaterial

Budgeted

/std.cost

Actualusage

Actualcost

Flash

467kg

$2perkg

$934

500kg

$1,200

Bang

933kg

$3perkg

$2799

730kg

$2,200

Total

1400kg

$3733

1230kg

$3,400

Mix:1:2

Totalvariance=$333(F)

Directmaterialmixvariance

(Actualusageinactualmix–Actualusageinstd.mix)xstandardcostperunitofmaterial

Actualusageinstd.mix

Actualusage

inactualmix

Difference

Standardcostperunit

Variance

Flash

410kg

500kg

90kg(A)

X$2

$180(A)

Bang

820kg

730kg

90kg(F)

X$3

$270(F)

Total

$90(F)

Materialpricevariance

Actualcostofactualusage–standardpricexactualusage

Actualcost

Standardcostxactualusage

Std.costofactualusage

Variance

Flash

$1,200

$2perkgx500kg

$1,000

$200(A)

Bang

$2,200

$3perkgx730kg

$2,190

$10(A)

Total

$3,400

$3290

$210(A)

Directmaterialyieldvariance

(Actualusageinstd.mix–Std.usageinstd.mix)xstandardcostperunitofmaterial

Actualusageinstd.mix

Std.usagein

std.mix

Difference

Standardcostperunit

Variance

Flash

410kg

467kg

57kg(F)

X$2

$114(F)

Bang

820kg

933kg

113kg(F)

X$3

$339(F)

Total

$453(F)

Materialtotalusagevariance

(Actualusageofactualoutput–budgetedusageofactualoutput)xstandardcostperunitofmaterial

Actualusageofactualoutput

Std.usageofactualoutput

Standardcostperunitofmaterial

Variance

Flash

500kg

467kg

$2kg

$66(A)

Bang

730kg

933kg

$3kg

$609(F)

Total

1230kg

1400kg

$543(F)

Mix:1:1.46

Mix:1:2

Sumofthecalculation

$

$

Budgetedcost

3733

Directmaterialtotalvariance

333(F)

Directmaterialtotalprice

variance

210(A)

Directmaterialtotalusage

variance

543(F)

Directmaterialmixvariance

90(F)

Directmaterialyield

variance

453(F)

Actualcost

3400

Whatshouldhavebeentheactualtotalusage

ofthematerialinputsinthestd.mix?

Units(kg)

Totalusageofmaterialinputs(500+730)

1,230

Standardmixofactualusage

1/3Flash

1230x1/3=410

2/3Bang

1230x2/3=820

Total

1230

1

ACTUALCOST

STANDARD

2

COST

A A A A AQ M P Q M

S A S S S S SP Q M P Q M P

FB

Directmaterialmixvariance

(Actualusageinactualmix–Actualusageinstd.mix)xstandardcostperunitofmaterial

Actualusageinstd.mix

Actualusageinactualmix

Difference

Standardcostperunit

Variance

Flash

410kg

500kg

90kg(A)

X$2

$180(A)

Bang

820kg

730kg

90kg(F)

X$3

$270(F)

Total

$90(F)

2.Labourtotalvariance

Idletimevariance

Idlehoursxstandardrate

Labourefficiencyvariance(standardhoursfortheactualoutput–actualhours)xstandardrate

Labourratevariance

Actualcostforactualhours–Actual

hoursxstandardrate

LabourtotalvarianceActualcostforactualhours–standardcostforactualoutputs

Directmaterialyieldvariance

(Actualusageinstd.mix–Std.usageinstd.mix)xstandardcostperunitofmaterial

Actualusageinstd.mix

Std.usageinstd.mix

Difference

Standardcostperunit

Variance

Flash

410kg

467kg

57kg(F)

X$2

$114(F)

Bang

820kg

933kg

113kg(F)

X$3

$339(F)

Total

$453(F)

Actualoutput

laborusage(hours/unit)

laborrate(￥/h)

actual

standard

actual

standard

1000

2.3

2

3.87

5

Sumofthecalculation

$

$

Budgetedcost

3733

Directmaterialtotalvariance

333(F)

Directmaterialtotalpricevariance

210(A)

Directmaterialtotalusagevariance

543(F)

Directmaterialmixvariance

90(F)

Directmaterialyieldvariance

453(F)

Actualcost

3400

Thetotalvariance

产量

人工消耗

工资率

人工成本

实际产量

1000

标准消耗

2000h

标准工资

5/h

10000

实际产量

1000

实际消耗

2300h

实际工资

3.87/h

8900

ACTUALCOST

STANDARDCOST

1 2

A A A A AQ M P Q M

S A S S S S SP Q M P Q M P

FB

Thelabourefficiencyvariance

产量

人工消耗

工资率

人工成本

实际产量

1000

标准消耗

2000h

标准工资

5/h

10000

实际产量

1000

实际消耗

2300h

标准工资

5/h

11500

2.Labourtotalvariance

Idletimevariance

Idlehoursxstandardrate

Labourefficiencyvariance(standardhoursfortheactualoutput–actualhours)xstandardrate

Labourratevariance

Actualcostforactualhours–Actualhoursxstandardrate

LabourtotalvarianceActualcostforactualhours–standardcostforactualoutputs

Thelabourratevariance

产量

人工消耗

工资率

人工成本

实际产量

1000

实际消耗

2300h

标准工资

5/h

11500

实际产量

1000

实际消耗

2300h

实际工资

3.87/h

8900

Actualoutput

laborusage(hours/unit)

laborrate(￥/h)

actual

standard

actual

standard

1000

2.3

2

3.87

5

LectureExample2

learningcurveeffect

Produce1500unitsofX

ActualcostofGradeZis$17,500for3080hours

1unitofXisexpectedtouse5hoursofGradeZ@standardrateof$5perlabourhour

A75%learningcurveissupposedwhentheproductionincreasesby10times

Afterproducing1000unitsofX,thelearningcurvebecomesconstant

100hourswererecordedasidletime

Thetotalvariance

产量

人工消耗

工资率

人工成本

实际产量

1000

标准消耗

2000h

标准工资

5/h

10000

实际产量

1000

实际消耗

2300h

实际工资

3.87/h

8900

Allowingforthelearningcurveeffect

Theaveragehoursofworkissupposedtobereducedby75%whentheproductionincreasesby10times.

Averagestandardhoursperunitforfirst1000units:

75%x75%x75%x5=2.1hours

Thelabourefficiencyvariance

产量

人工消耗

工资率

人工成本

实际产量

1000

标准消耗

2000h

标准工资

5/h

10000

实际产量

1000

实际消耗

2300h

标准工资

5/h

11500

Labourtotalvariance

Actualcostforactualhours–standardcostforstandardhours(basedonactualoutput)

$17,500-$5perhourx2.1hoursperunitx1,500units=$17500–$15750=$1750(A)

Thelabourratevariance

产量

人工消耗

工资率

人工成本

实际产量

1000

实际消耗

2300h

标准工资

5/h

11500

实际产量

1000

实际消耗

2300h

实际工资

3.87/h

8900

Labourratevariance

Actualcostforactualhours–standardcostforactualhours

$17500–3080hoursx$5perhour=$17500–

$15400=$2100(A)

LectureExample2

learningcurveeffect

Produce1500unitsofX

ActualcostofGradeZis$17,500for3080hours

1unitofXisexpectedtouse5hoursofGradeZ@standardrateof$5perlabourhour

A75%learningcurveissupposedwhentheproductionincreasesby10times

Afterproducing1000unitsofX,thelearningcurvebecomesconstant

Idletimevariance

Idlehoursxstandardrate

100hoursx$5perhour=$500(A)

100hourswererecordedasidletime

Labourefficiencyvariance

(standardhoursfortheactualoutput–actualhours)xstandardrate

1,500unitsx2.1hoursperunit=3,150hours

Actualhours=3080hours–100hours=2980hours

Varianceinhours:3150–2980=170hours(F)

Labourefficiencyvariance=170hoursx$5perhour=

$850(F)

Allowingforthelearningcurveeffect

Theaveragehoursofworkissupposedtobereducedby75%whentheproductionincreasesby10times.

Averagestandardhoursperunitforfirst1000units:

75%x75%x75%x5=2.1hours

Sumofcalculation

Labourtotalvariance:$1750(A)

Labourratevariance:$2100(A)

Labourefficiencyvariance:$850(F)

Idletimevariance:$500(A)

Labourtotalvariance

Actualcostforactualhours–standardcostforstandardhours(basedonactualoutput)

$17,500-$5perhourx2.1hoursperunitx1,500units=$17500–$15750=$1750(A)

3.Variableproductionoverheadtotalvariance

VariableproductionoverheadefficiencyvarianceBudgeted/std.costforactualhours–budgetedcostforthenumberofunitsactuallyproduced

VariableproductionoverheadexpenditurevarianceActualcostforactualhours–budgeted/std.costforactualhours

Variableproductionoverheadtotalvariance

Actualcost–flexiblebudgetedcost

Labourratevariance

Actualcostforactualhours–standardcostforactualhours

$17500–3080hoursx$5perhour=$17500–

$15400=$2100(A)

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Actualoutput

timeusage(h/unit)

overheadrate(￥/h)

actual

standard

actual

standard

400

1.9

2

1.62

1.5

Idletimevariance

Idlehoursxstandardrate

100hoursx$5perhour=$500(A)

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Thetotalvariance

产量

时间消耗

费率

制造费用

实际产量

400

标准消耗

800h

标准费率

1.5/h

1200

实际产量

400

实际消耗

760h

实际费率

1.62/h

1230

Labourefficiencyvariance

(standardhoursfortheactualoutput–actualhours)xstandardrate

1,500unitsx2.1hoursperunit=3,150hours

Actualhours=3080hours–100hours=2980hours

Varianceinhours:3150–2980=170hours(F)

Labourefficiencyvariance=170hoursx$5perhour=

$850(F)

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Theefficiencyvariance

产量

时间消耗

费率

制造费用

实际产量

400

标准消耗

800h

标准费率

1.5/h

1200

实际产量

400

实际消耗

760h

标准费率

1.5/h

1140

Sumofcalculation

Labourtotalvariance:$1750(A)

Labourratevariance:$2100(A)

Labourefficiencyvariance:$850(F)

Idletimevariance:$500(A)

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Theexpenditurevariance

产量

时间消耗

费率

制造费用

实际产量

400

实际消耗

760h

标准费率

1.5/h

1140

实际产量

400

实际消耗

760h

实际费率

1.62/h

1230

Variableproductionoverheadtotalvariance

VariableproductionoverheadefficiencyvarianceBudgeted/std.costforactualhours–budgetedcostforthenumberofunitsactuallyproduced

VariableproductionoverheadexpenditurevarianceActualcostforactualhours–budgeted/std.costforactualhours

Variableproductionoverheadtotalvariance

Actualcost–flexiblebudgetedcost

Fixedproductionoverheadtotalvariance

Fixedproductionoverheadvolumevariance(Actual–Budgetedproductionvolume)xstd.absorption

rateperunit

FixedproductionoverheadexpenditurevarianceActualoverhead–fixedbudgeted/std.cost

Fixedproductionoverheadtotalvariance

Actualcost–fixedoverheadabsorbed

LOGO

Actualoutput

timeusage(h/unit)

overheadrate(￥/h)

actual

standard

actual

standard

400

1.9

2

1.62

1.5

output

Timeusage

Fixedoverhead

Budgeted1000

Budgeted5000

Budgeted20000

Actual1100

Actual5400

Actual20450

LOGO

Thetotalvariance

产量

时间消耗

费率

制造费用

实际产量

400

标准消耗

800h

标准费率

1.5/h

1200

实际产量

400

实际消耗

760h

实际费率

1.62/h

1230

Thetotalvariance

outputunits

Absorptionrate

Fixedoverhead

$

实际产量

1100

20/unit

吸收费用

22000

实际产量

1100

实际费用

20450

LOGO

Theefficiencyvariance

产量

时间消耗

费率

制造费用

实际产量

400

标准消耗

800h

标准费率

1.5/h

1200

Theexpenditurevariance

Output

(units)

Activitylevel(hours)

Fixedoverhead$

budgeted1000

budgeted5000h

budgeted

20000

Actual1100

Actual5400h

Actual

20450

实际产量

400

实际消耗

760h

标准费率

1.5/h

1140

Thevolumevariance

Output(units)

Absorptionrate

Fixedoverhead

$

budgeted1000

20/unit

budgeted

20000

actual1100

20/unit

absorbed22000

Favourable

LOGO

Theexpenditurevariance

产量

时间消耗

费率

制造费用

实际产量

400

实际消耗

760h

标准费率

1.5/h

1140

Output

(units)

Activitylevel(hours)

Fixedoverhead$

Standard

of

absorbed

actual1100×5 actual

×4

22000

5500h

budgeted

budgeted

budgeted

1000 ×55000h

×4

20000

Actual1100

Actual5400h

Actual

20450

实际产量

400

实际消耗

760h

实际费率

1.62/h

1230

Fixedproductionoverheadtotalvariance

Fixedproductionoverheadvolumevariance(Actual–Budgetedproductionvolume)xstd.absorption

rateperunit

Fixedproductionoverheadvolumecapacityvariance(budgetedhoursofworkforfixedoutputs–actualhoursworked)xstd.absorptionrateperhour

Fixedproductionoverheadvolumeefficiencyvariance(Actualproductionhours–budgetedproductionhoursforactualoutputs)xstd.absorptionrateperhour

FixedproductionoverheadexpenditurevarianceActualoverhead–fixedbudgeted/std.cost

Fixedproductionoverheadtotalvariance

Actualcost–fixedoverheadabsorbed

Fixedproductionoverheadtotalvariance

Fixedproductionoverheadvolumevariance(Actual–Budgetedproductionvolume)xstd.absorption

rateperunit

Fixedproductionoverheadexpenditurevariance

Actualoverhead–fixedbudgeted/std.cost

Fixedproductionoverheadtotalvariance

Actualcost–fixedoverheadabsorbed

Output(units)

Absorptionrate

Fixedoverhead$

budgeted1000

5h/unit

4/hour

budgeted20000

actual1100

5h/unit

4/hour

absorbed22000

output

Timeusage

Fixedoverhead

Budgeted1000

Budgeted5000

Budgeted20000

Actual1100

Actual5400

Actual20450

Output

(units)

Absorptionrate

Fixedoverhead$

budgeted

budgeted

4/hour

budgeted

20000

1000 ×55000h

actual110

actual

4/hour

absorbed2

21600

×4.9095400h

standard

4/hour

absorbed1

22000

actual1100×55500h

0

Thetotalvariance

outputunits

Absorptionrate

Fixedoverhead

$

实际产量

1100

20/unit

吸收费用

22000

Volumeefficiencyvariance

Output(units)

Absorptionrate

Fixed

overhead$

actual1100

4.909h/unit

5400h

4/hour

absorbed2

21600

actual1100

5h/unit

5500h

4/hour

absorbed1

22000

实际产量

1100

实际费用

20450

Volumecapacityvariance

Output

(units)

Absorptionrate

Fixed

overhead$

budgeted

1000

5h/unit

5000h

4/hour

budgeted

20000

actual1100

4.909h/unit

5400h

4/hour

absorbed2

21600

Theexpenditurevariance

Output

(units)

Activitylevel(hours)

Fixedoverhead$

budgeted1000

budgeted5000h

budgeted

20000

Actual1100

Actual5400h

Actual

20450

Expenditurevar.

A–B

Totalvar.

A–S

(actualvolume–budgetedvolume)

(actualvolume×standardh/u–actualhours)×standardrateperhour

Volumeefficiencyvar.

×standardrate

perunit=B–S.

Hours=Vol.×h/u

Volumevar.

(actualhours–budgetedvolume

×standardh/u)×standardrateperhour

Volumecapacityvar.

Thevolumevariance

Output(units)

Absorptionrate

Fixedoverhead

$

budgeted1000

20/unit

budgeted

20000

actual1100

20/unit

absorbed22000

Favourable

Salespricevariance

(Actualsellingprice–standardsellingprice)xactualvolume

Salesvariance

Actualsales–fixedbudgetsales

Salesquantityvariance

(Actualsalesvolumeinstd.mix–budgetedsalesvolumeinstd.mix)xstandardprofit

perunit

Salesmixvariance

(Actualvolumesoldinstd.mix–Actual

volumesoldinactualmix)xstandardprofit

perunit

Salesvolumevariance

(Actualsalesvolume–budgetedsales

volume)xstandardprofitperunit

Salesvariance

Effectonprofitduetothe

sellingpricedifference

Effectonprofitduetothesellingvolumedifference

Output

(units)

Activitylevel(hours)

Fixedoverhead$

Standard

of

absorbed

actual1100×5 actual

×4

22000

5500h

budgeted

budgeted

budgeted

1000 ×55000h

×4

20000

Actual1100

Actual5400h

Actual

20450

Lectureexample3

P302

Product

Budgeted

salesunits

Revenue

$

Costs

$

Profit

$

Profitper

unit

$

Actual

salesunits

Chocolate

crunch

400

8,000

6,000

2,000

5

280

StrawberrySundae

300

12,000

11,100

900

3

630

Total

700

20,000

17,100

2,900

Noactualpricehere!

Requiredtocalculate:

Standardmix/proportion4:3

Salesvolumevariance

Salesquantityvariance

Salesmixvariance

Fixedproductionoverheadtotalvariance

Fixedproductionoverheadvolumevariance(Actual–Budgetedproductionvolume)xstd.absorption

rateperunit

Fixedproductionoverheadvolumecapacityvariance(budgetedhoursofworkforfixedoutputs–actualhoursworked)xstd.absorptionrateperhour

Fixedproductionoverheadvolumeefficiencyvariance(Actualproductionhours–budgetedproductionhoursforactualoutputs)xstd.absorptionrateperhour

Fixedproductionoverheadexpenditurevariance

Actualoverhead–fixedbudgeted/std.cost

Fixedproductionoverheadtotalvariance

Actualcost–fixedoverheadabsorbed

Salesvolumevariance

ChocolateCrunch

400

280

120unitsx$5(A)

StrawberrySundae Total

300

630

330unitsx$3(F)

Budgetedsales

Actualsales

(Budgetedsales–Actualsales)x

std.profitperunit

Salesvolumevariancein$Total

$600(A)

$990(F)

$390(F)

Actual

mix/proportion1:2.25

Output(units)

Absorptionrate

Fixedoverhead$

budgeted1000

5h/unit

4/hour

budgeted20000

Salesmixvariance

Step1:HowmanyunitsofChocolateCrunch&Strawberry

Sundaeshouldhavebeensoldinthestandardmix

oftheactualtotalunitssold?

Units

Totalquantitysold(280+630)

910

Standardmixofactualsales

4/7ChocolateCrunch

910x4/7=520

3/7StrawberrySundae

910x3/7=390

Total

910

actual1100

5h/unit

4/hour

absorbed22000

Output(units)

Absorptionrate

Fixedoverhead$

budgeted

budgeted

4/hour

budgeted

20000

1000 ×55000h

actual110

actual

absorbed2

Salesmixvariance

Step2:Differencebetweentheactualsalesinthestandardmixandtheactualsalesintheactualmixmultiplestandardprofitperunit

Actualsales

instd.mix

Actualsales

inactualmix

Difference

Standardprofitperunit

Variance

ChocolateCrunch

530units

280units

240(A)

X$5

$1,200(A)

StrawberrySundae

390units

630units

240(F)

X$3

$720(F)

Total

910units

910units

$480(A)

×4.9095400h

4/hour

21600

standard

4/hour

absorbed1

22000

actual1100×55500h

0

Salesquantityvariance

Differencebetweenactualsalesinstandardmixandthebudgetedsalesinstandardmixmultiplethestandardprofitperunit

Actualsalesinstd.mix

budgetedsalesinstandardmix

Difference

Standardprofitperunit

Variance

ChocolateCrunch

530units

400units

120(F)

X$5

$600(F)

StrawberrySundae

390units

300units

90(F)

X$3

$270(F)

Total

910units

700units

210units

$870(F)

Sum

$

Salesmixvariance

480(A)

Salesquantityvariance

870(F)

Salesvolumevariance

390(F)

Volumeefficiencyvariance

Output(units)

Absorptionrate

Fixedoverhead$

actual1100

4.909h/unit5400h

4/hour

absorbed2

21600

actual1100

5h/unit5500h

4/hour

absorbed1

22000

P

302

ACTUALSALES

Actualmix

Actualvolume

BUDGETED

SALES

AQ

C

910

S

AM

280

630

AP

1680

(6/u)

1260

(2/u)

AQ

910

AM

280

630

BP

1400

(5/u)

1890

(3/u)

AQ

910

BM

520

390

BP

2600

(5/u)

1170

(3/u)

BQ

700

BM

400

300

BP

2000

(5/u)

900

(3/u)

2940

350A

3290

480A

3770

870F

2900

Volumecapacityvariance

Output(units)

Absorptionrate

Fixedoverhead$

budgeted1000

5h/unit5000h

4/hour

budgeted

20000

actual1100

4.909h/unit5400h

4/hour

absorbed2

21600

LOGO

Topic2operatingstatement

Anoperatingstatementisaregularreportformanagementofactualcostsandrevenues,usuallyshowingvariancesfrombudget.Thestatementwilllistallindividualcostandsalesvariances.Itismoreconvenienttoshowsalesvariancesfirst,thencostvariancesshownbelow.

Totalvar.

Expenditurevar.

(actualvolume–

A–B

Hours=Vol.×h/u

A–S

budgetedvolume)

×standardrateperunit=B–S.

Volumevar.

Volumeefficiencyvar.

(actualvolume×standardh/u–actualhours)×standardrateperhour

(actualhours–budgetedvolume

×standardh/u)×standardrateperhour

Volumecapacityvar.

LOGO

Toreconcilebudgetedprofittoactualprofit:

Budgetedprofit+Salesvar.=Actualsalesminusthe

standardcostofsales(Supposedprofit)

Supposedprofit+Costvar.=Actualprofit

Budgetedprofit+Salesandcostvar.=Actualprofit

Variances=Actualprofit–Budgetedprofit

5.Salesvariance

Effectonprofitduetothesellingpricedifference

Effectonprofitduetothesellingvolumedifference

LOGO

Theformofoperatingstatements

Theformthatittakesdependsuponwhetherafirmusesanabsorptionormarginalcostingsystem.

Lectureexample3 P302

Product

Budgetedsalesunits

Revenue

$

Costs

$

Profit

$

Profitperunit

$

Actualsalesunits

Chocolate

400

8,000

6,000

2,000

5

280

crunch

StrawberrySundae

300

12,000

11,100

900

3

630

Total

700

20,000

17,100

2,900

Noactualpricehere!

Requiredtocalculate:

Salesmixvariance

Salesquantityvariance

Standardmix/proportion4:3

Salesvolumevariance

Salesvolumevariance

Budgetedsales

Actualsales

(Budgetedsales–Actualsales)x

std.profitperunit

Salesvolumevariancein

$Total

ChocolateCrunch

400

280

120unitsx$5(A)

$600(A)

Actualmix/