|material quantity variance|
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Definition of material quantity variance
material quantity variance
(actual quantity X standard price) - (standard quantity allowed standard price);
The difference between the actual and budgeted quantities
Very early orders for materials before the completion
A listing of all the materials and quantities that go to make up a completed product.
a document that contains information about
An itemization of the parts and subassemblies required to create a
A listing of all parts and subassemblies required to produce one
A bill of material that accounts for the generation and
the difference between total actual overhead
the budget variance of the two variance approach to analyzing overhead variances
A statistical measure of the degree to which random variables move together.
A measure of the degree to which returns on two assets move in
a readily identifiable part of a product; the cost of such a part
The cost of all materials used in a cost object, such as finished goods.
The variance between the budgeted and actual mixes of
Inventory that has been physically marked as being for a
economic order quantity
Order size that minimizes total inventory costs.
Economic order quantity (EOQ)
The order quantity that minimizes total inventory costs.
economic order quantity (EOQ)
an estimate of the number
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
fixed overhead volume variance
see volume variance
Indented bill of material
A bill of material reporting format under which successively
labor efficiency variance
the number of hours actually worked minus the standard hours allowed for the production
Labor efficiency variance
The difference between the amount of time that was budgeted
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 rate variance
The difference between the actual and standard direct labor rates
labor yield variance
(standard mix X actual hours X standard rate) - (standard mix X standard hours X standard rate);
material mix variance
(actual mix X actual quantity X standard price) - (standard mix X actual quantity X standardprice);
material price variance
total actual cost of material purchased
Material requirements planning
A computerized system used to calculate material
Material requirements planning (MRP)
A computer-driven production methodology
material requisition form
a source document that indicates
Material review board
A company committee typically comprising members representing
material yield variance
(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price);
The proportional size of a financial misstatement. It can be construed as
A characterization of the magnitude of a financial statement item's effect on a
Materials price variance
The difference between the actual and budgeted cost to
Materials requirement planning
Computer-based systems that plan backward from the production schedule
materials requirements planning (MRP)
a computerbased information system that simulates the ordering and
A document listing the quantities of specific parts to be withdrawn
Matrix bill of material
A bill of materials chart listing the bills for similar products,
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.
Modular bill of material
A bill of material format in which components and subassemblies
Multilevel bill of material
An itemization of all bill of material components, including
Any inventory item that does not match its original design
the fixed overhead volume variance;
The waste materials resulting from a production process.
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
Phantom bill of material
A bill of materials for a subassembly that is not normally
Weighted sum of the covariance and variances of the assets in a portfolio.
Production yield variance
The difference between the actual and budgeted proportions
A firm that reacts to excess supply or excess demand by adjusting quantity rather than price. Contrast with price adjuster.
Quantity Theory of Money
Theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
Base-level items used by the manufacturing process to create either
Raw material supply agreement
As used in connection with project financing, an agreement to furnish a
Unprocessed goods bought for manufacture, part of inventory.
Raw materials inventory
The total cost of all component parts currently in stock that
Repair bill of material
A special bill itemizing changes needed to refurbish an
material that has been reworked and returned to stock.
material that has been reserved for a specific purpose.
Selling price variance
The difference between the actual and budgeted selling price for
The covariance between a variable and the lagged value of the variable; the same as
Single-level bill of material
A list of all components used in a parent item.
standard quantity allowed
the quantity of input (in hours or some other cost driver measurement) required at standard for the output actually achieved for the period
Summarized bill of materials
A bill of materials format showing the grand total
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
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 measure of dispersion of a set of data points around their mean value. The mathematical
The weighted average of the squared deviations from the
a difference between an actual and a standard or
The dispersion of a variable. The square of the standard deviation.
Average value of squared deviations from mean. A measure of volatility.
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.
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
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
a fixed overhead variance that represents
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