This website uses cookies to ensure you have the best experience. Learn more

Variable Analysis

800 words - 3 pages

Variable Analysis
Introduction
The variance analysis for the Brightlite line of products will be used to promote management action at the earliest possible stages. This analysis will process the examining in detail each variance between actual and standard costs. The results will determine the reasons why budgeted results were not met. The types or variances computed depend on the responsibility centers and the level of management for which the review is performed. Since the objective is to determine the degree of corrective action needed, the variances computed must relate to key performance indicators considered critical to the success of the responsibility center. The primary objective of cost variance analysis is to permit organizational managers to detect and correct inefficiencies wherever they exist in operations involving expenditures. Decisions are generally necessary as to what kinds of variances to compute whether or not to investigate and whether or not to investigate a particular variance once computed.

Variances
The variances for the Brightlite line of lighting products are as follows:
a) Price variance for raw materials purchased
= (standard price - actual price) * actual qty purchased
= (6.8-7.1)*11,400
= (3,420) U

b) Raw materials usage variance
= (standard usage - actual usage) * standard price
= ((1,900*5)-9,260)*6.8
= 1,632 F

c) Direct labor rate variance
= (standard rate - actual rate) * actual hours
= ((14-14.35)*4,420
= (1,547) U

d) Direct labor efficiency variance
= (standard hours - actual hours) * standard rate
= ((1,900*2.4)-4,420)*14
= 1,960 F

e) Variable overhead spending variance
= (standard rate - actual rate) * actual hours
= ((12,513/2,910)-4.5)*2,910
= (582) U

f) Variable overhead efficiency variance
= (standard hours - actual hours) * standard rate
= ((1,900*2.4)-4,420)*4.5
= 630 F

Explanations

The unfavorable purchase price variance may be indicative that higher than standard quality raw material inputs were purchased¡Xand the favorable raw materials usage variance suggests that this was probably the case. Consideration should be made when purchasing higher than standard quality inputs unless it is indicated by favorable usage variance month over month as compared to the unfavorable price variance. The raw materials budget variance was unfavorable. In this case, using higher than standard quality was not a good deal. Working higher paid and experienced workers may have caused the unfavorable direct labor variance of $0.35 per hour. The cost indicated for labor was equalized by the labor efficiency achieved. The continued labor efficiency can be maintained by focusing on the more productive and efficiency...

Find Another Essay On Variable Analysis

Although businesses have common factors, the objectives of a business are extremely variable

2201 words - 9 pages common factors, the objectives of a business are extremely variable. For Example, firms like WH Smith or Tesco are likely to be most interested in profit gain; their overall business objective is likely to be profit maximisation. Leisure Centres on the other hand, are likely to be more interested in the service, which they are able to offer to the public; therefore Leisure Centres' business objectives are likely to be geared toward social

The independent variable Essay

954 words - 4 pages necessary in behavioral science. (Hergenhahn & Olson, 2005) The behavior is studied by identifying the variables. The relationship between the stimuli and the responses is the theoretical process called the intervening variable. (Hergenhahn & Olson, 2005) The dependent variable is the behavior. (Hergenhahn & Olson, 2005) The independent variable is what causes the change in behavior. (Hergenhahn & Olson, 2005) The complexity of human

The Benefits of Continuously Variable Transmissions (CVT)

2444 words - 10 pages , although not very efficient, they offer convenience of not shifting gears. The continuously variable transmissions (CVT) can now satisfy societies goal of reducing our effect on the environment with the convenience of the automatic transmission. To make the most fuel efficient vehicle, every aspect of the vehicle needs to be efficiently designed to the max. While the internal combustion engine is nearing perfection for efficiency

The Variable Rate Income Tax: Flat Tax

2192 words - 9 pages switching account types. This is what allows the rich to keep getting richer and prevents the poor from getting significantly better. Taxes are the government’s main source of revenue, with roughly 47% of the tax revenue coming from income tax (Griffith and Schwabish). Because of this high percentage, as well as the strain caused from the extensive filing process, this is an important issue today. If nothing is done about the variable rate

Variable of Income Deficits After Having Children

1292 words - 6 pages At times women in their marriage might have to take some time from their careers to have children, they obviously might have to accept some type of deficits in income relative to what they would have earned had they not had children early or late in their marriage. Throughout this portion of research I will give married couples some advantages and disavantages on whether the deficits in income vary by the age at which married couples have

Variable differences within cultures throughout our world

1692 words - 7 pages society. Journal of Comparative Family Studies, 19(1), 123-135. Retrieved on August 22, 2009, from EBSCOHost Library.San Francisco. (2009). In Encyclopædia Britannica. Retrieved August 22, 2009, from Encyclopædia Britannica Online: http://www.search.eb.com.ezproxy.apollolibrary.comSFPD. (2009). SFPD crime analysis. Retrieved August 23, 2009 from http://www.sfgov.org/site/uploadedfiles/police/information/compstat%20monthly%202006%20jantosept.pdf

Teaching Reflection on a Single Variable Equation Math Lesson

920 words - 4 pages I selected to do a small group math lesson. At this time of the year eighth graders are reviewing for Standardized Testing. One of the things they need practice on is their algebra skills, such as solving linear equations. The focus of this lesson was on solving linear equations with one variable. There are various standards that deal with solving equations, but for these students I narrowed it down to single-variable equations: Solve linear

Variable Production of Carbon Dioxide and Ethanol by the Yeast Saccharomyces in Fermentation due to Temperature Changes

2361 words - 9 pages AbstractUnder anaerobic conditions, the yeast Saccharomyces cerevisiae was used in determining how much carbon dioxide was produced at several temperature points in Celsius. From these reactions, it is assumed that temperature increase will have an effect on higher production rates of carbon dioxide. In order to achieve these values, several materials were used in the experiment. Two 500 mL flasks were used, one contain 250 mL of sucrose and the

The following essay analyzes, synthesizes, and expounds upon two articles appertaining to the variable criteria requisite to enter major Literature's exclusive Canon, and the need for its reform

1924 words - 8 pages The reasons that certain literary works become masterpieces, and are embraced and extolled, others receive encomium for a certain period of time and then fall into disfavor, and still others are seen as loathing and contemptible pieces of garbage are not always completely clear. However, Jane Tompkins cogently shows, through systematic example and analysis, that the decision is not an arbitrary one, nor is it a result of some endemic attribute

An algorithm which allows the user to input a variable number of examination marks, calculates the average and prints the average

1243 words - 5 pages number is correctly guessed the computer automatically picks a new number and plays the game again with the same child. If the number is not guessed correctly the game is restarted with another child.Application 2Develop an algorithm, again using pseudocode, which allows the user to input a variable number of examination marks, calculates the average and prints the average and the entered examination marks in descending order.Due to these

impact of work motivation factor towards job satisfaction

1268 words - 6 pages heteroscedasticity to measure the existence of heteroscedatisicty. If the results is significant it means that heteroskedasticity happen in the research while if the results is inisignificant it means the research is homoskedasticity. Statistical Test Multiple Regression Analysis This study will use multiple regressions to analyze the relationship between independent variable and dependent variable. Cooper and Schindler (2011) define multiple

Similar Essays

Analysis Of Political Leanings With Education Level As A Variable

1487 words - 6 pages polarized, we decided to take our research even farther. We achieved this by forming a second, more specific hypothesis. This time, we hypothesized that people in general have become more moderate over the past thirty years.In order to test this theory, we added a new variable. This variable, which analyzes each individual decade from the 1970’s to present, allowed us change in beliefs over time. There are a few reasons why we decided that

Exploratory Data Analysis From World's Bank's World Development Indicators Of 2003: Analysis Of Variable Series Ferat80 And Ferat01

2007 words - 8 pages From the Systat data file for WDI2003 data related to several variables concerning global development and related fields have been complied and give code names. The code FERAT is a representation of the ratio of women age 65 and above per 100 men in the same age group. FERAT80 and FERAT01 are the same variable but represent data collected in two different years. FERAT80 is data corresponding to statistics collected worldwide in the year 1980

Variable Costing Vs Absorption Costing Essay

1147 words - 5 pages DefinitionAbsorption costing, also known as full costing refers to a system in which all the fixed manufacturing overheads are allocated to products. The alternative system which assigns only variable manufacturing costs to products then fixed costs added separately is termed marginal costing.Variable costing vs. Absorption costingBefore discussing the arguments for absorption costing, an illustration of both methods would provide a better

Absorption/Full Costing, Variable/Marginal Costing, And Activity Based Accounting

3100 words - 12 pages essay, written critically to evaluate the application of standard costing and variance analysis to any size of business, and concludes with a verdict that whether or not standard costing and variance analysis is applicable to each business with consideration of its costs and benefits of the system. 1.0. Part B – Costing Methods 1.1. Marginal/Variable Costing Term “marginal” is extensively used and known with reference to the economics which means