Flexible Budgets andVariance Analysis：弹性预算及方差分析

FlexibleBudgetsand

VarianceAnalysisChapter8Withover28,000locations,howdoesMcDonald’smaintaincostandqualitycontrol?Itusesstandards,budgetsandvarianceanalysisThematerialstandardforahamburgeristhesameineverylocationMaterialvariancesarecomputedforeveryingredientbycomparingwhatwasactuallyusedwithwhatshouldhavebeenusedforthenumberofhamburgerssoldeachdayWhatarethesestandards?Italsohasnonfinancialstandardssuchasaveragedrive-throughtimeKnowingwhatwentwrongandwhatwentrighthelpsmanagersplanLearningObjective1Distinguishbetweenflexiblebudgetsandmaster(static)budgets.StaticBudgetsAstaticbudgetispreparedforonlyonelevelofagiventypeofactivity.Allactualresultsarecomparedwiththeoriginalbudgetedamounts,evenifsalesvolumeismoreorlessthanoriginallyplanned.MasterBudgetVariance:SalesActual$217,000Thevariancesofactualresultsfromthemasterbudgetarecalledmaster(static)budgetvariances.Budget$279,000Variance$62,000UMasterBudgetVariance:ExpensesActualexpensesthatarelessthanbudgetedexpensesresultinfavorableexpensevariances.Actualexpensesthatexceedbudgetedexpensesresultinunfavorableexpensevariances.Objective2Useflexible-budgetformulastoconstructaflexiblebudgetbasedonthevolumeofsales.FlexibleBudgetAflexiblebudget(variablebudget)isabudgetthatadjustsforchangesinsalesvolumeandothercost-driveractivities.FlexibleBudgetFormulasTodevelopaflexiblebudget,managersdeterminerevenueandcostbehavior(withintherelevantrange)withrespecttocostdrivers.Objective3Prepareanactivity-basedflexiblebudget.Activity-BasedFlexibleBudgetAnactivity-basedflexiblebudgetisbasedonbudgetedcostsforeachactivityandrelatedcostdriver.Withineachactivitycenter,costsdependonanappropriatecostdriver.Objective4Explaintheperformanceevaluationrelationshipbetweenmaster(static)budgetsandflexiblebudgets.EvaluationofFinancialPerformanceComparingtheflexiblebudgettoactualresultsaccomplishesanimportantperformanceevaluationpurpose.EvaluationofFinancialPerformance2)revenueorvariablecostsperunitofactivityandfixedcostsperperiodwerenotasexpected.Actualresultsmaydifferfromthemasterbudgetbecause...1)salesandothercost-driveractivitieswerenotthesameasoriginallyforecasted,orEvaluationofFinancialPerformanceFlexible-budgetvariancesActivity-levelvariancesEvaluationofFinancialPerformanceUnits 7,000 7,000 –Sales $217,000 $217,000 –Variablecosts 158,200

152,600

5,670UContributionmargin $58,730 $64,400 $5,670UFixedcosts 70,300

70,000

300UOperatingincome $(11,570) $(5,600) $5,970UActualresultsatactualactivitylevelFlexiblebudgetforactualsalesactivityFlexible-budgetvariancesEvaluationofFinancialPerformanceUnits 7,000 9,000 2,000USales $217,000 $279,000 $62,000UVariablecosts 152,600

196,200

43,600FContributionmargin $64,400 $82,800 $18,400UFixedcosts 70,000

70,000

–Operatingincome $(5,600) $12,800 $18,400UMasterbudgetFlexiblebudgetforactualsalesactivitySales-activityvariancesTotalmasterbudgetvariances=$11,570+$12,800=$24,370Objective5Computeflexible-budgetvariancesandsales-activityvariances.IsolatingtheCausesofVariancesManagersusecomparisonsamongactualresults,masterbudgets,andflexiblebudgetstoevaluateorganizationalperformance.IsolatingtheCausesofVariancesEffectivenessisthedegreetowhichagoal,objective,ortargetismet.Performancemaybeeffective,efficient,both,orneither.Efficiencyisthedegreetowhichinputsareusedinrelationtoagivenlevelofoutputs.Flexible-BudgetVariancesTotalflexible-budgetvariance=Totalactualresults–Totalflexible-budgetplannedresultsFlexible-budgetvariancesActualresults$(11,570)Flexiblebudget$(5,600)$5,970UnfavorableSales-ActivityVariancesTotalsales-activityvariance=Actualsalesunit–Masterbudgetedsalesunits×BudgetedcontributionmarginperunitSales-ActivityVariancesActivity-levelvariancesFlexiblebudgetMasterbudget$18,400Unfavorable(9,000–7,000)×$9.20Objective6Computeandinterpretpriceandusagevariancesforinputsbasedoncost-driveractivity.SettingStandardsAnexpectedcostisthecostthatismostlikelytobeattained.Astandardcostisacarefullydevelopedcostperunitthatshouldbeattained.PerfectionStandards...oridealstandards,areexpressionsofthemostefficientperformancepossibleunderthebestconceivableconditions,usingexistingspecificationsandequipment.Noprovisionismadeforwaste,spoilage,machinebreakdowns,andthelike.CurrentlyAttainableStandards...arelevelsofperformancethatmanagerscanachievebyrealisticlevelsofeffort.Theymakeallowancesfornormaldefects,spoilage,waste,andnonproductivetime.Trade-OffsAmongVariancesImprovementsinoneareacouldleadtoimprovementsinothersandviceversa.Likewise,substandardperformanceinoneareamaybebalancedbysuperiorperformanceinothers.WhentoInvestigateVariancesWhenshouldmanagementinvestigateavariance?Manyorganizationshavedevelopedsuchrulesofthumbas“investigateallvariancesexceeding$5,000or25%ofexpectedcost,whicheverislower.”ComparisonwithPriorPeriodsSomeorganizationscomparethemostrecentbudgetperiod’sactualresultswithlastyear’sresultsforthesameperiod.Flexible-BudgetVarianceinDetailStandardperunitofoutput: Direct Direct

Material

LaborStd.inputsexpected 5pounds ½hourStd.priceexpected $2 $16Std.costexpected $10 $8VariancesfromMaterialandLaborStandardsActualresultsfor7,000unitsproduced:DirectmaterialPoundspurchasedandused:36,800Price/pound:$1.90Totalactualcost:$69,920DirectlaborHoursused:3,750Actualprice(rate):$16.40Totalactualcost:$61,500VariancesfromMaterialandLaborStandardsFlexiblebudgetortotalstandardcostallowedUnitsofgoodoutputachievedInputallowedperunitofoutputStandardunitpriceofinput××=StandardDirect-MaterialsCostAllowed:VariancesfromMaterialandLaborStandardsDirectmaterialflexible-budgetvarianceActualcost$69,920Flexiblebudget$70,000$80FavorableVariancesfromMaterialandLaborStandardsFlexiblebudgetortotalstandardcostallowed:$56,000Unitsofgoodoutputachieved:7,000Inputallowedperunitofoutput:½hourStandardunitpriceofinput:$16/hour××=StandardDirect-LaborCostAllowed:VariancesfromMaterialandLaborStandardsDirectlaborflexible-budgetvarianceActualcost$61,500Flexiblebudget$56,000$5,500UnfavorablePriceandUsageVariancesPricevariance:Usagevariance:(Actualquantity–Standardquantity)×Standardprice(Actualprice–StandardPrice)×ActualquantityPriceVarianceComputationsDirectmaterialpricevariance:Directlaborpricevariance:($16.40–$16.00)perhour×3,750hours=$1,500U($1.90–$2.00)perpound×36,800pounds=$3,680FUsageVarianceComputationsDirectmaterialusagevariance:Directlaborusagevariance:[3,750–(7,000×½)]hours×$16perhour=$4,000U[36,800–(7,000×5)]pounds×$2perpound=$3,600UFavorableorUnfavorableVariance?Todeterminewhetheravarianceisfavorableorunfavorable,uselogicratherthanmemorizingaformula.DirectMaterialsFlexible

BudgetVarianceDirectmaterialflexible-budgetvarianceActualcost$69,920Flexiblebudget$70,000$80FAQ×SP=$73,600$3,680F$3,600UDirectLaborFlexible

BudgetVarianceDirectlaborflexible-budgetvarianceActualcost$61,500Flexiblebudget$56,000$5,500UAH×SP=$60,000$1,500U$4,000UInterpretationofPriceandUsageVariancesPriceandusagevariancesarehelpfulbecausetheyprovidefeedbacktothoseresponsibleforinputs.Managersshouldnotusethesevariancesalonefordecisionmaking,control,orevaluation.Objective7Computevariableoverheadspendingandefficiencyvariances.Variable-Overhead

EfficiencyVarianceWhenactualcost-driveractivitydiffersfromthestandardamountallowedforthea