成本与管理会计亨格瑞第13版英文版CA07

$88
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Static Budget
Budgeted selling price is $120 per jacket. Fixed manufacturing costs are expected to be $276,000
within a relevant range between 0 and 12,000 suits. Variable and fixed period costs are ignored in this
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Static and Flexible Budgets
Static budget
➢ Prepared for only one level of activity. ➢ It is based on the level of output planned at the start
Key difference is the use of the actual output level in the flexible budget.
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Static Budget
Assume that Webb manufactures and sells jackets.
example. The static budget for April 2008 is based on selling 12,000
suits. What is the static-budget operating profit?
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Static Budget
Revenues (12,000 × $120) Less Expenses: Variable (12,000 × $88) Fixed Budgeted operating profit
Budgeted variable costs per jacket are as follows:
Direct materials cost
$ 60
Direct manufacturing labour
16
Variable manufacturing overhead
12
Total variable costs
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Basic Concepts
Management by Exception – the practice of focusing attention on areas not operating as expected (budgeted)
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Amount
Management by Exception
$1,440,000
1,056,000 276,000
$ 108,000
Assume that Webb produced and sold 10,000 suits at $125 each with actual variable costs of $95.01 per suit and fixed manufacturing costs of $285,000.
Actual operating profit
$ 14,900
What is the static-budget variance of operating profit?
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Static-Budget Variance
A static-budget variance is : (Actual result - Budgeted amount in the static budget).
Managers focus on quantities and costs that exceed standards, a practice known as
management by exception.
Direct Labor
Direct Material
Standard
Type of Product Cost
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StatiΒιβλιοθήκη Baidu Budget
What was the actual operating profit?
Revenues (10,000 × $125) $1,250,000
Less Expenses:
Variable (10,000 × $95.01)
950,100
Fixed
285,000
of the budget period. ➢ The master budget is an example of a static budget.
Flexible budget
➢ Developed using budgeted revenues or cost amounts based on the level of output actually achieved in the budget period.
A favourable (F) variance is a variance that increases operating profit relative to the budgeted amount.
An unfavourable (U) variance is a variance that decreases operating profit relative to the budgeted amount.
成本与管理会计亨格瑞第13 版英文版CA07
2020/10/8
Controlling Costs
Predetermined or Set Standard
Measure Actual
COMPARE
Actual Vs Standard
Variance
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Basic Concepts
Variance – difference between an actual and an expected (budgeted) amount
Purpose of variance
➢ Management by exception ➢ Performance evaluation ➢ Motivate managers ➢ Prompt strategy change