Sana Archive
Uses of Quality Cost Information (Report): Learning Objectives of this article: What are the advantages and limitations of a quality cost report? A quality cost report has several uses. First quality cost information helps managers see the financial significance of defects. Managers usually are
Managerial Usefulness/Importance of Variance Analysis: Learning Objectives: Explain the importance of variance analysis for management in decision making process. Costs of production are effected by internal factors over which management has a large degree of control. An important job of executive management is to
Internal Rate of Return (IRR) Method in Capital Budgeting Decisions: Learning Objectives: Define and explain the internal rate of return (IRR) in Accounting. Evaluate the acceptability of an investment project using the internal rate of return (IRR) method. What are the advantages and disadvantages
Use of Information Technology in Job Order Costing System: Learning objectives of the articles: What are advantages of using bar code technology in job order costing system. Bar code technology can be used to record labor time–reducing the drudgery in that task and increasing
Universality of Management Definition: Universality of management means the reality that management is needed in all types and sizes of organizations, at all organizational levels, in all organizational areas, and in organizations in all countries around the globe.
Unit-Level Activities Definition: Activities that arise as a result of the total volume of goods and services that are produced, and that are performed each time a unit is produced.
Over-applied and Underapplied Overhead Learning objectives of this article: Define, explain and calculate under-applied and over-applied overhead rate. Give an example. Definition and Explanation of Over and Underapplied Overhead: Since the predetermined overhead rate is established before a period begins and is based entirely
Under-Applied Overhead Definition: A debit balance in the Manufacturing Overhead account that arises when the amount of overhead cost actually incurred is greater than the amount of overhead cost applied to Work in Process during a period.
Capital Budgeting Decisions With Uncertain Cash Flows: Learning Objectives: Evaluate an investment project that has uncertain cash flows. The analysis in this chapter (capital budgeting decisions) has assumed that all of the future cash flows are known with certainty. However, future cash flows are
Factory Overhead Yield Variance: Learning Objective of the article: Define and explain overhead yield variance. Calculate overhead yield variance when three variance and two variance approaches are used. Formula of Overhead Yield Variance: (Standard hours allowed for expected output × Standard overhead rate) –
Variable Overhead Efficiency Variance: Learning Objective of the article: Define and explain variable overhead efficiency variance. How is variable overhead efficiency variance calculated? What are the reasons / causes of unfavorable variable overhead efficiency variance. When companies adopt four variance analysis approach they divide
Manufacturing Overhead Cost Standards: Learning Objective of the article: How manufacturing overhead standards are set? Procedures for establishing and using standard factory overhead rates are similar to the methods of dealing with the estimated direct and indirect factory overhead and its application to jobs
Manufacturing Overhead Budget: Learning Objective of the article: Define and explain manufacturing overhead budget. Prepare a manufacturing overhead budget. The manufacturing overhead budget provides a schedule for all costs of production other than direct materials and direct labor. Example of a Manufacturing Overhead Budget:
Overhead Application Definition: The process of charging manufacturing overhead cost to job cost sheets and to the Work in Process account.
Over-applied Overhead Definition: Over-applied overhead is a credit balance in the Manufacturing Overhead account that arises when the amount of overhead cost applied to Work in Process is greater than the amount of overhead cost actually incurred during a period.
Overall or Net Factory Overhead Variance: Definition: Overall or net factory overhead variance is the difference between actually incurred factory overhead and expenses charged into process using the standard factory overhead rate. Formula of Overall or Net Factory Overhead Variance: Overall or net overhead
Over and Under Trading: Over Trading: Over-trading and under-trading are facets of over and under-capitalization. Over trading is a curse to the business. A company which is under-capitalized will try to do too much with the limited amount of capital which it has. For
Over-capitalization and Under-capitalization: The total amount of funds available to an undertaking should be neither too much nor too low. An important question, therefore is the question of capitalization of the company, i.e., the determination of the amount which the company should have at