|fixed overhead spending variance|
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Definition of fixed overhead spending variance
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
A statistical measure of the degree to which random variables move together.
Long-lived property owned by a firm that is used by a firm in the production of its income.
The ratio of sales to fixed assets.
A cost that is fixed in total for a given period of time and for given production levels.
Annuity contracts in which the insurance company or issuing financial institution pays a
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of
In the Euromarket the standard periods for which Euros are traded (1 month out to a year out) are
Conventional bonds for which the coupon rate is set as a fixed percentage of the par value.
A nonnegotiable debt security that can be redeemed at some fixed price or according to
A country's decision to tie the value of its currency to another country's currency, gold
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
An offering of securities at a fixed price.
A one-time offer to purchase a stated number of shares at a stated fixed price,
A loan on which the rate paid by the borrower is fixed for the life of the loan.
In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
The selection of portfolios based on the means and variances of their returns. The
Mean-variance efficient portfolio
Related: Markowitz efficient portfolio
Graph of the lowest possible portfolio variance that is attainable for a given
The portfolio of risky assets with lowest variance.
Weighted sum of the covariance and variances of the assets in a portfolio.
The covariance between a variable and the lagged value of the variable; the same as
A measure of dispersion of a set of data points around their mean value. The mathematical
Variance minimization approach to tracking
An approach to bond indexing that uses historical data to
Specifies the permitted minimum or maximum quantity of securities that can be delivered to
Things that the business owns and are part of the business infrastructure – fixed assets may be
Costs that do not change with increases or decreases in the volume of goods or services
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
A general term referring to period costs, such as selling, administration and financial expenses.
Any cost other than a direct cost – may refer to an indirect production cost and/or to a non-production expense.
The process of spreading production overhead equitably over the volume of production of goods or services.
The rate (often expressed per hour) applied to the time taken to produce a product/service, used to allocate production overheads to particular products/services based on the time taken. May be calculated on a business-wide or cost centre basis.
A general term referring to indirect costs.
Costs that are constant within a defined level of activity but that can increase or decrease when
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
A method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved.
An informal term that refers to the variety of long-term operating
fixed expenses (costs)
Expenses or costs that remain the same in amount,
overhead generally refers to indirect, in contrast to direct,
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Fixed Charge Coverage Ratio
A measure of how well a company is able to meet its fixed
The weighted average of the squared deviations from the
the amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account
the difference between total actual overhead
the budget variance of the two variance approach to analyzing overhead variances
a cost that remains constant in total within a specified
fixed overhead volume variance
see volume variance
labor efficiency variance
the number of hours actually worked minus the standard hours allowed for the production
labor mix variance
(actual mix X actual hours X standard rate) - (standard mix X actual hours X standard rate);
labor rate variance
the actual rate (or actual weighted average rate) paid to labor for the period minus the standard rate multiplied by all hours actually worked during the period;
labor yield variance
(standard mix X actual hours X standard rate) - (standard mix X standard hours X standard rate);
material price variance
total actual cost of material purchased
material quantity variance
(actual quantity X standard price) - (standard quantity allowed standard price);
material mix variance
(actual mix X actual quantity X standard price) - (standard mix X actual quantity X standardprice);
material yield variance
(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price);
the fixed overhead volume variance;
a credit balance in the overhead account
any factory or production cost that is indirect to
overhead application rate
see predetermined overhead rate
overhead efficiency variance
the difference between total budgeted overhead at actual hours and total budgeted
overhead spending variance
the difference between total actual overhead and total budgeted overhead at actual
predetermined overhead rate
an estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate
standard overhead application rate
a predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate
total overhead variance
the difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead
the difference between total actual cost incurred
a debit balance in the overhead account at the end of a period; when the applied overhead amount is less than the actual overhead that was incurred
variable overhead efficiency variance
the difference between budgeted variable overhead based on actual input activity and variable overhead applied to production
variable overhead spending variance
the difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity
a difference between an actual and a standard or
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
a fixed overhead variance that represents
A measure of the degree to which returns on two assets move in
A security that pays a specified cash flow over a
The dispersion of a variable. The square of the standard deviation.
Direct materials mix variance
The variance between the budgeted and actual mixes of
All the costs incurred during the manufacturing process, minus the
An item with a longevity greater than one year, and which exceeds a company’s
A cost that does not vary in the short run, irrespective of changes in any
That portion of total overhead costs which remains constant in size
Labor efficiency variance
The difference between the amount of time that was budgeted
Labor rate variance
The difference between the actual and standard direct labor rates
Materials price variance
The difference between the actual and budgeted cost to
Materials quantity variance
The difference between the actual and budgeted quantities
Production yield variance
The difference between the actual and budgeted proportions
Selling price variance
The difference between the actual and budgeted selling price for
Costs that do not depend on the level of output.
Average value of squared deviations from mean. A measure of volatility.
Fixed Exchange Rate
An exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market.
Expenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included.
Flexible Spending Account
A form of cafeteria plan allowing employees to pay
An inventory storage technique under which permanent
Land, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation.
Cost of doing business which does not change with the volume of business. Examples might be rent for business premises, insurance payments, heat and light.
Fixed Interest Rate
A rate that does not fluctuate with general market conditions.
Fixed Rate Loan
Loan for a fixed period of time with a fixed interest rate for the life of the loan.
Longer-Term Fixed Assets
Assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
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