Direct Material Usage Variance

	Direct Material Usage Variance In variance analysis, direct material usage (efficiency, quantity) variance is the difference between the standard quantity of materials that should have been used for the number of units actually produced, and the actual quantity of materials used, valued at the standard cost per unit of material. It is one of the two components (the other is direct material price variance) of direct material total variance. Example Let us assume that standard direct material cost of widget is as follows: :2 kg of unobtainium at € 60 per kg ( = € 120 per unit). Let us assume further that during given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost € 13,144. Under those assumptions direct material usage variance can be calculated as: Direct material usage variance can be reconciled to direct material total variance by way of direct material price variance: See direct material total variance#Example and direct material price variance#Example for compu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Variance Analysis (accounting) In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned, or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues. The concept of variance is intrinsically connected with planned and actual results and effects of the difference between those two on the performance of the entity or company. Types of variances Variances can be divided according to their effect or nature of the underlying amounts. When effect of variance is concerned, there are two types of variances: * When actual results are better than expected results given variance is described as favorable variance. In common use favorable variance is denoted by the letter F - usually in parentheses (F). * When actual results are worse than expected results given variance is described as adverse variance, or unfavourable variance. In common use adverse variance is denoted by the letter U or the letter A - usually in parenth ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Standard Cost Standard cost accounting is a traditional cost accounting method introduced in the 1920s, as an alternative for the traditional cost accounting method based on historical costs. Adolph Matz (1962) ''Cost accounting.'' p. 584. Overview Standard cost accounting uses ratios called efficiencies that compare the labor and materials actually used to produce a good with those that the same goods would have required under "standard" conditions. As long as actual and standard conditions are similar, few problems arise. Unfortunately, standard cost accounting methods developed about 100 years ago, when labor comprised the most important cost of manufactured goods. Standard methods continue to emphasize labor efficiency even though that resource now constitutes a (very) small part of the cost in most cases ". Standard cost accounting can hurt managers, workers, and firms in several ways. For example, a policy decision to increase inventory can harm a manufacturing manager's performance eva ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Direct Material Price Variance In variance analysis (accounting) direct material price variance is the difference between the standard cost and the actual cost for the actual quantity of material purchased. It is one of the two components (the other is direct material usage variance) of direct material total variance. Example Let us assume that the standard direct material cost of widget is as follows: :2 kg of unobtainium at € 60 per kg ( = € 120 per unit). Let us assume further that during the given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost € 13,144. Under those assumptions direct material price variance can be calculated as: Direct material price variance is because Todd pays too much for steel can be reconciled to direct material total variance by way of direct material usage variance: spending variance seen as per product cost (21262)-(20060) See direct material total variance#Example and direct material usage variance#Example for computations of bot ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Direct Material Total Variance In variance analysis (accounting) direct material total variance is the difference between the actual cost of actual number of units produced and its budgeted cost in terms of material. Direct material total variance can be divided into two components: the direct material price variance, the direct material usage variance. Example Let us assume that standard direct material cost of Widget (economics), widget is as follows: :2 kg of unobtainium at $ 60 per kg ( = $ 120 per unit). Let us assume further that during the given period, 100 widgets were manufactured, using 212 kg of unobtainium which cost $ 13,144. Under those assumptions direct material total variance can be calculated as: Direct material total variance can be reconciled to direct material price variance and direct material usage variance by: See direct material usage variance#Example and direct material price variance#Example for computations of both components. See also Variance analysis (accounting) ... [...More Info...] [...Related Items...] OR:* [Wikipedia] [Google] [Baidu]
	Widget (economics) Placeholder names are words that can refer to things or people whose names do not exist, are temporarily forgotten, are not relevant to the salient point at hand, are to avoid stigmatization, are unknowable/unpredictable in the context in which they are being discussed, or are otherwise de-emphasized whenever the speaker or writer is unable to, or chooses not to, specify precisely. Placeholder names for people are often terms referring to an average person or a predicted persona of a typical user. Linguistic role These placeholders typically function grammatically as nouns and can be used for people (e.g. '' John Doe, Jane Doe''), objects (e.g. '' widget''), locations ("Main Street"), or places (e.g. ''Anytown, USA''). They share a property with pronouns, because their referents must be supplied by context; but, unlike a pronoun, they may be used with no referent—the important part of the communication is not the thing nominally referred to by the placeholder, but t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Unobtainium Unobtainium is a term used in fiction, engineering, and common situations for a material ideal for a particular application but impractically hard to get. Unobtainium originally referred to materials that do not exist at all, but can also be used to describe real materials that are unavailable due to extreme rarity or cost. Less commonly, it can mean a device with desirable engineering properties for an application that are exceedingly difficult or impossible to achieve. The properties of any particular example of unobtainium depend on the intended use. For example, a pulley made of unobtainium might be massless and frictionless. But for a nuclear rocket, unobtainium might have the needed qualities of lightness, strength at high temperatures, and resistance to radiation damage: A combination of all three qualities is impossible with today's materials. The concept of unobtainium is often applied hand-wavingly, flippantly, or humorously. The word "unobtainium" derives humorously ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Variance Analysis (accounting) In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned, or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues. The concept of variance is intrinsically connected with planned and actual results and effects of the difference between those two on the performance of the entity or company. Types of variances Variances can be divided according to their effect or nature of the underlying amounts. When effect of variance is concerned, there are two types of variances: * When actual results are better than expected results given variance is described as favorable variance. In common use favorable variance is denoted by the letter F - usually in parentheses (F). * When actual results are worse than expected results given variance is described as adverse variance, or unfavourable variance. In common use adverse variance is denoted by the letter U or the letter A - usually in parenth ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]