ACCT 200 Outline of Last Lecture I Movement of Goods II Factory Labor III FOH Rate Outline of Current Lecture I Budgeting Basics II Incremental budgeting III Zero Based budgeting IV Standards versus Actuals V Variance analysis Current Lecture I II III IV V Budgeting Basics a Planning Directing Controlling Incremental budgeting based on adjustments from past years and an increase for inflation a Budgets introduce incentives b Fosters Budgetary slack build in slack room into budget c Fosters Overspending spend it or lose it mindset Zero Based budgeting budgeting from scratch rarely done unless involving a new business Standards versus Actuals a Standard price the budgeted price b Standard Cost Standard Price x Standard Quantity c Actuals what the real numbers are actual price paid quantity produced Variance analysis a Favorable good comparison b Unfavorable bad comparison c We won t use variances in FOH d VERY IMPORTANT Variances Actuals Standards i Negative variances favorable coming in under budget ii Positive variances unfavorable coming in over budget e DM Price Variance AQ AP SP i Actual quantity actual price standard price f DM Quantity Variance SP AQ SQ These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute i Standard price actual quantity standard quantity g DL Rate Variance AT AR SR i Actual time actual rate standard rate h DL Time Variance SR AT ST i Standard rate actual time standard time i Total Variance Rate Variance Time Variance
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