ACCTG 102 Lecture Notes - Lecture 13: Fixed Cost, Stabilisation Force In Bosnia And Herzegovina, Outsourcing
Document Summary
Total fixed overhead variance = actual fixed overhead applied fixed overhead. Standard hours for actual units produced sh = actual units x standard hours allowed per unit. Applied fixed overhead apoh = sh x sfor. Foh spending variance = actual fixed overhead (afoh) budgeted fixed overhead (bfoh) Foh volume variance = budgeted fixed overhead (bfoh) applied fixed overhead (sh x sfor) Total fixed overhead variance = spending variance volume variance. Short-run decision making consists of choosing among alternatives with an immediate or limited end in view. Some decisions that tend to be short-run in nature often have long-run consequences. Short-run decisions are often small-scale actions that serve a larger purpose. Example: producing a component instead of buying it from suppliers. Can consist of both variable and fixed costs. Changes in supply and demand for resources must be considered. Also known as differential or incremental costs. Relevant costing is of value in solving many different types of problems.
