LECTURE THREE: COST CENTRES AND VARIANCE COMPARISON

1. Controllable

2. Budgets comparison

3. The control cycle

4. Flexed budget

5. Variances

5.1. Variance reports

5.2. Uncontrollable variances

5.3. Favorable

5.4. Adverse

6. Variances calculations

6.1. Sales revenue variance:Total = volume variances + price variances

6.2. Cost variance:Total direct cost variance = Volume variance (ZERO in flexed budget) + Purchase price variance+ Efficiency of usage variance

7. Cost variance reason

8. Exception reporting

9. Controllable and uncontrollable variances

10. Feedback and Feedforward control system

11. Responsibility centres

11.1. Responsibility centre

11.2. Three types of responsibility centre

12. Cost centers

13. Cost centre measurements

13.1. Productivity

13.2. cost per unit

13.3. Cost per standard hour

13.4. Actual versus Budgeted performance

13.5. Ratios

14. Profit centers

15. Profit centre measurements

15.1. Profit margin = ( Net profit/Sales) x 100%

15.2. Gross profit margin = (Gross profit/Sales) x 100%

15.3. Cost profit margin = (Gross profit/Sales) x 100%

16. Ivenstment centers

17. Ivestment center measurement

18. Information comparison

18.1. Corresponding

18.2. Previous periods

18.3. Budgets

18.4. Forecasts

19. Previous period comparison

20. Forecasts comparison