AMA Q22 - Chapter 8 Flashcards
1
Q
List the 7 types of operational causes of variances
A
- Material price
- Material usage
- Labour rate
- Idle time
- Labour efficiency
- Fixed overhead expenditure
- Fixed overhead volume
2
Q
Interdependence of variances
A
how one change in a variance can have a direct impact on another
3
Q
Three categories of variances
A
- Controllable expenditure- poor purchase decisions
- Uncontrollable expenditure - market changes causing fluctuations in price
- Inaccurate standard - poor planning + use of unrealistic standard
4
Q
How is non-controllable variance calculated?
A
comparing the original standard to the revised one
revised
5
Q
How is controllable variance calculated?
A
Comparing the revised standard to the actual cost
actual
6
Q
A
