Đang chuẩn bị liên kết để tải về tài liệu:
Lecture Introduction to managerial accounting: Chapter 9 - Folk, Garrison, Noreen

Chapter 9 - Flexible budgets and overhead analysis. After studying Chapter 9, you should be able to: repare a flexible budget and explain the advantages of the flexible budget approach over the static budget approach, prepare a performance report for both variable and fixed overhead costs using the flexible budget approach, use the flexible budget to prepare a variable overhead performance report containing only a spending variance,. | Flexible Budgets and Overhead Analysis Chapter9 Static Budgets and Performance Reports Hmm! Comparing static budgets with actual costs is like comparing apples and oranges. Let’s look at CheeseCo. Static budgets are prepared for a single, planned level of activity. Performance evaluation is difficult when actual activity differs from the planned level of activity. Static Actual Budget Results Variances Machine hours 10,000 Variable costs Indirect labor 40,000 $ Indirect materials 30,000 Power 5,000 Fixed costs Depreciation 12,000 Insurance 2,000 Total overhead costs 89,000 $ Static Budgets and Performance Reports CheeseCo Static Actual Budget Results Variances Machine hours 10,000 8,000 Variable costs Indirect labor 40,000 $ 34,000 $ Indirect materials 30,000 25,500 Power 5,000 3,800 Fixed costs Depreciation 12,000 12,000 Insurance 2,000 2,050 Total overhead costs 89,000 $ 77,350 $ Static Budgets and Performance Reports CheeseCo Static Actual Budget Results Variances Machine hours 10,000 8,000 2,000 U Variable costs Indirect labor 40,000 $ 34,000 $ Indirect materials 30,000 25,500 Power 5,000 3,800 Fixed costs Depreciation 12,000 12,000 Insurance 2,000 2,050 Total overhead costs 89,000 $ 77,350 $ Static Budgets and Performance Reports U = Unfavorable variance CheeseCo was unable to achieve the budgeted level of activity. CheeseCo Static Actual Budget Results Variances Machine hours 10,000 8,000 2,000 U Variable costs Indirect labor 40,000 $ 34,000 $ $6,000 F Indirect materials 30,000 25,500 Power 5,000 3,800 Fixed costs Depreciation 12,000 12,000 Insurance 2,000 2,050 Total overhead costs 89,000 $ 77,350 $ Static Budgets and Performance Reports CheeseCo F = Favorable variance Actual cost is less than budgeted cost. Static Actual Budget Results Variances Machine hours 10,000 8,000 2,000 U Variable costs Indirect labor 40,000 $ 34,000 $ $6,000 F Indirect materials 30,000 25,500 4,500 F Power 5,000 3,800 1,200 F Fixed costs Depreciation 12,000 12,000 0 Insurance 2,000 | Flexible Budgets and Overhead Analysis Chapter9 Static Budgets and Performance Reports Hmm! Comparing static budgets with actual costs is like comparing apples and oranges. Let’s look at CheeseCo. Static budgets are prepared for a single, planned level of activity. Performance evaluation is difficult when actual activity differs from the planned level of activity. Static Actual Budget Results Variances Machine hours 10,000 Variable costs Indirect labor 40,000 $ Indirect materials 30,000 Power 5,000 Fixed costs Depreciation 12,000 Insurance 2,000 Total overhead costs 89,000 $ Static Budgets and Performance Reports CheeseCo Static Actual Budget Results Variances Machine hours 10,000 8,000 Variable costs Indirect labor 40,000 $ 34,000 $ Indirect materials 30,000 25,500 Power 5,000 3,800 Fixed costs Depreciation 12,000 12,000 Insurance 2,000 2,050 Total overhead costs 89,000 $ 77,350 $ Static Budgets and Performance Reports CheeseCo Static Actual Budget Results Variances Machine hours .