ACC 304 Module 9 Study Guide Chapter 7 Learning Objectives Understand static budgets and static budget variances Define and discuss the term variance How are variances calculated in a static budget What does favorable and unfavorable mean Why don't we just say positive and negative numbers Examine the concept of a flexible budget and learn how to develop it Define and discuss the purpose of a flexible budget Contrast it to the static budget What is the three step process to develop a flexible budget Calculate flexible budget variances and sales volume variances Define and discuss, the flexible budget variance the sales volume variance including Purpose and method of calculating the variance What to do with the information Explain why standard costs are often used in variance analysis Define and discuss the term standard What is the purpose What advantages do standards have over actuals Compare and contrast inputs, prices, and costs Compute price variances and efficiency variances for direct cost categories Define and discuss price variances and efficiency variances What do they measure How are they calculated Understand how managers use variances What are the three ways that managers use variances Define and discuss the term management by exception How do we treat favorable variances Compare and contrast with how we treat unfavorable variances Define and discuss the terms effectiveness and efficiency Describe benchmarking and explain its role in cost management Define and discuss the term benchmarking How does management use this to run the organization Chapter 8 Learning Objectives Explain the similarities and differences in planning variable overhead costs and fixed overhead costs Compare and contrast planning for variable and fixed overhead costs Develop budgeted variable overhead cost rates and budgeted fixed overhead cost rates List and discuss the steps to calculate budgeted overhead rates How does this vary from fixed to variable How is this like Job Order Costing and ABC Costing Compute the variable overhead flexible budget variance, the variable overhead efficiency variance, and the variable overhead spending variance Define and discuss the terms variable overhead flexible budget variance , the variable overhead efficiency variance , and the variable overhead spending variance How are they alike and different What is the purpose of each How are they related How are they computed Compute the fixed overhead flexible budget variance, the fixed overhead spending variance, and the fixed overhead production volume variance Define and discuss the terms fixed overhead flexible budget variance , the fixed overhead production volume variance , and the fixed overhead spending variance How are they alike and different What is the purpose of each How are they related How are they computed What is done with any remaining variances at the end of the period Show how the 4 variance analysis approach reconciles the actual overhead incurred with the overhead amounts allocated during the period What is the 4 variance analysis approach Does it always have to be four variables Are there other measures that could be useful in evaluating performance Explain the relationship between the sales volume variance and the production volume variance Define and discuss sales volume variances What is it How is it calculated How is it used Compare and contrast sales volume variance with production volume variance

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Question: ACC 304 Module 9 Study Guide Chapter 7 Learning Objectives Understand static budgets and static-budget variances. Define and discuss the term variance . How are

ACC 304 Module 9 Study Guide

Chapter 7 Learning Objectives

Understand static budgets and static-budget variances.
- Define and discuss the term variance.
  - How are variances calculated in a static budget?
  - What does favorable and unfavorable mean? Why don't we just say positive and negative numbers?

Examine the concept of a flexible budget and learn how to develop it.
- Define and discuss the purpose of a flexible budget.
  - Contrast it to the static budget.
- What is the three-step process to develop a flexible budget?

Calculate flexible-budget variances and sales-volume variances.
- Define and discuss, the flexible-budget variance the sales-volume variance including
  - Purpose and method of calculating the variance
  - What to do with the information

Explain why standard costs are often used in variance analysis.
- Define and discuss the term standard.
  - What is the purpose?
  - What advantages do standards have over actuals?
- Compare and contrast inputs, prices, and costs

Compute price variances and efficiency variances for direct-cost categories.
- Define and discuss price variances and efficiency variances.
  - What do they measure?
  - How are they calculated?

Understand how managers use variances.
- What are the three ways that managers use variances?
- Define and discuss the term management by exception.
- How do we treat favorable variances? Compare and contrast with how we treat unfavorable variances.
- Define and discuss the terms effectiveness and efficiency.

Describe benchmarking and explain its role in cost management.
- Define and discuss the term benchmarking.
- How does management use this to run the organization?

Chapter 8 Learning Objectives

Explain the similarities and differences in planning variable overhead costs and fixed overhead costs.
- Compare and contrast planning for variable and fixed overhead costs.

Develop budgeted variable overhead cost rates and budgeted fixed overhead cost rates.
- List and discuss the steps to calculate budgeted overhead rates
  - How does this vary from fixed to variable?
  - How is this like Job Order Costing and ABC Costing?

Compute the variable overhead flexible-budget variance, the variable overhead efficiency variance, and the variable overhead spending variance.
- Define and discuss the terms variable overhead flexible-budget variance, the variable overhead efficiency variance, and the variable overhead spending variance.
  - How are they alike and different?
  - What is the purpose of each?
  - How are they related?
  - How are they computed?

Compute the fixed overhead flexible-budget variance, the fixed overhead spending variance, and the fixed overhead production-volume variance.
- Define and discuss the terms fixed overhead flexible-budget variance, the fixed overhead production volume variance, and the fixed overhead spending variance.
  - How are they alike and different?
  - What is the purpose of each?
  - How are they related?
  - How are they computed?
- What is done with any remaining variances at the end of the period?

Show how the 4-variance analysis approach reconciles the actual overhead incurred with the overhead amounts allocated during the period.
- What is the 4-variance analysis approach?
- Does it always have to be four variables?
- Are there other measures that could be useful in evaluating performance?

Explain the relationship between the sales-volume variance and the production-volume variance.
- Define and discuss sales-volume variances.
  - What is it?
  - How is it calculated?
  - How is it used?
- Compare and contrast sales-volume variance with production-volume variance.

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