Cost Accounting – 12^th Edition

Ch 8 Terms

Denominator level – the denominator of the budgeted fixed overhead rate computation

Denominator-level variance – see production-volume variance

Fixed overhead flexible-budget variance – the difference between actual fixed overhead costs and the fixed overhead costs in the flexible budget

Fixed overhead spending variance – same as the fixed overhead flexible-budget variance. The difference between actual fixed overhead costs and the fixed overhead costs in the flexible budget

Output-level overhead variance – see production-volume variance

Production-denominator level – the denominator of the budgeted manufacturing fixed overhead rate computation

Production-volume variance – the difference between budgeted fixed overhead and fixed overhead allocated on the basis of actual output produced. Also called denominator-level variance and output-level overhead variance

Standard costing – costing method that traces direct costs to output produced by multiplying the standard prices or rates by the standard quantities of inputs allowed for actual outputs produced and allocated indirect costs on the basis of the standard indirect rates times the standard quantities of the allocation bases allowed for actual outputs produced

Total-overhead variance – the sum of the flexible-budget variance and the production-volume variance

Variable overhead efficiency variance – the difference between the actual quantity of variable overhead cost-allocation base used and the budgeted quantity of variable overhead cost-allocation base that should have been used to produce the actual output, multiplied by the budgeted variable overhead cost per unit of cost-allocation base

Variable overhead flexible-budget variance – the difference between actual variable overhead costs and flexible-budget variable overhead costs

Variable overhead spending variance – the difference between the actual variable overhead cost per unit and the budgeted variable overhead cost per unit of the cost-allocation base, multiplied by the actual quantity of the variable overhead cost-allocation base used for actual output