Acc206 Problems: Budgeting and Variance Analysis – Week 4, Week 5

Summary

Budgeting and variance analysis are key accounting tasks. Students learn how to prepare budgets and analyse variances.

Preparing a financial budget

Students work on a budgeted balance sheet. They use given data to calculate balances for cash, accounts receivable, inventory and more.

Preparing an operating budget

Students prepare sales, inventory, purchases, cost of goods sold and operating expenses budgets. They use given data to calculate amounts for April and May.

Computing and journalizing standard cost variances

Students compute price and efficiency variances for direct materials and direct labor. They journalize the usage of direct materials and the assignment of direct labor.

Journalizing manufacturing overhead

Students journalize the actual manufacturing overhead and the applied manufacturing overhead. They journalize the movement of all production from work in progress.

Key terms

Budgeted balance sheet

A balance sheet that uses budgeted amounts.

Cost of goods sold

The direct costs of producing goods sold by a company.

Direct labor

The labor that goes directly into producing a product.

Direct materials

The materials that go directly into producing a product.

Manufacturing overhead

The indirect costs of manufacturing a product.

Variance analysis

The process of comparing actual costs to budgeted costs.

Questions this document helps with

• How do you prepare a budgeted balance sheet?
• What is the cost of goods sold?
• How do you compute price and efficiency variances?

Summary written with AI from the document's text.