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Flashcards in BEC Homework 2.3 Deck (15)
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The use of standard cost in the budgeting process
signifies that an organization most likely implemented an

flexible budget


Strategic budgets

long term budgets


Overhead volume variances

The overhead volume variance is a function of the budgeted amounts of overhead based on standard hours allowed compared with overhead applied at a predetermined rate to work in process.


Relevant range

Within this range Total fixed cost will not change . Variable cost will not change per unit


Budgetary control

Is the process of developing plans for a company's expected operations and contuinuing operations to help carry out those plan


Definition of budget

process of creating a formal plan and translating goals into a quantitative format is budget.


Static budgets

Is based for one level of activity and is not adjusted for actual units


Mater Budget

A master budget is the quantification of the company's overall plan and consists of any small budgets


Continuous budget

to add an addional period with the passage of each period


The first step in sales planning process

develop management guidelines specific to sales planning including the sales planning process and planning responsibilities A sales forecast consistant with specific guidelines cannot be gathered until the guidelines are devoloped


Rolling budget

Rolling budget continuously add a future period so that a time period is always projected into future


Flexible budgets

It is budget which is adjusted for actual level of activity
adjusted for inflation the same way as static budgets
it cannot be used to evaluate capacity utilization


Material price variance

is the responsibility of purchasing manager


Labour price variance

would not be attributable to union contract approve before the budgeting cycle. If the contract are approved before they woud be used as the basis of budget


The best basis upon which cost standards is

engineering standards based on attainable performance