Key Terms
- attainable standard
- level that may be reached with reasonable effort
- direct labor rate variance
- difference between the actual rate paid and the standard rate that should have been paid based on the actual hours worked
- direct labor time variance
- difference between the actual hours worked and the standard hours that should have been worked for the actual units produced
- direct labor variance
- measures how efficiently the company uses labor as well as how effective it is at pricing labor
- direct materials price variance
- difference between the actual price paid per unit for materials and what should have been paid per the standards
- direct materials quantity variance
- difference between the actual quantity of materials used and the standard materials that were expected to be used to make the actual units produced
- direct materials variance
- difference between the actual price or amount used and the standard amount
- favorable variance
- difference involving spending less, or using less, than the standard amount
- fixed factory overhead variance
- difference between the actual fixed overhead and applied fixed overhead
- flexible budget
- measurement and prediction of estimated revenues and costs at varying levels of production
- ideal standard
- level that could be achieved if everything ran perfectly
- standard
- expectation for a component used in production
- standard cost
- cost expectation for price paid and amount (quantities) used
- total direct labor variance
- actual labor costs compared to standard labor costs
- total direct materials cost variance
- difference between actual materials cost and standard materials cost
- total variable overhead cost variance
- total cost variance found by combining variable overhead rate variance and variable overhead efficiency variance
- unfavorable variance
- difference involving spending more or using more than the standard amount
- variable overhead efficiency variance
- difference between the actual hours worked and the standard hours expected for the units produced
- variable overhead rate variance
- difference between the actual variable manufacturing overhead and the variable overhead that was expected given the number of hours worked
- variance
- difference between standard and actual performance