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variable overhead efficiency variance |
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Definition of variable overhead efficiency variancevariable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production
Related Terms:overhead efficiency variancethe difference between total budgeted overhead at actual hours and total budgeted Capital market efficiencyReflects the relative amount of wealth wasted in making transactions. An efficient Continuous random variableA random value that can take any fractional value within specified ranges, as CovarianceA statistical measure of the degree to which random variables move together. Discrete random variableA random variable that can take only a certain specified set of discrete possible EfficiencyReflects the amount of wasted energy. Endogenous variableA value determined within the context of a model. Exogenous variableA variable whose value is determined outside the model in which it is used. Also called External efficiencyRelated: pricing efficiency. Informational efficiencyThe speed and accuracy with which prices reflect new information. Marketplace price efficiencyThe degree to which the prices of assets reflect the available marketplace Mean-variance analysisEvaluation of risky prospects based on the expected value and variance of possible outcomes. Mean-variance criterionThe selection of portfolios based on the means and variances of their returns. The Mean-variance efficient portfolioRelated: Markowitz efficient portfolio Minimum-variance frontierGraph of the lowest possible portfolio variance that is attainable for a given Minimum-variance portfolioThe portfolio of risky assets with lowest variance. Normal random variableA random variable that has a normal probability distribution. Portfolio varianceWeighted sum of the covariance and variances of the assets in a portfolio. Pricing efficiencyAlso called external efficiency, a market characteristic where prices at all times fully Random variableA function that assigns a real number to each and every possible outcome of a random experiment. Semi-strong form efficiencyA form of pricing efficiency where the price of the security fully reflects all Serial covarianceThe covariance between a variable and the lagged value of the variable; the same as Strong-form efficiencyPricing efficiency, where the price of a, security reflects all information, whether or VariableA value determined within the context of a model. Also called endogenous variable. Variable annuitiesAnnuity contracts in which the issuer pays a periodic amount linked to the investment Variable costA cost that is directly proportional to the volume of output produced. When production is zero, Variable life insurance policyA whole life insurance policy that provides a death benefit dependent on the Variable price securityA security, such as stocks or bonds, that sells at a fluctuating, market-determined price. Variable rate CDsShort-term certificate of deposits that pay interest periodically on roll dates. On each roll Variable rated demand bond (VRDB)Floating rate bond that can be sold back periodically to the issuer. Variable rate loanLoan made at an interest rate that fluctuates based on a base interest rate such as the VarianceA measure of dispersion of a set of data points around their mean value. The mathematical Variance minimization approach to trackingAn approach to bond indexing that uses historical data to Variance ruleSpecifies the permitted minimum or maximum quantity of securities that can be delivered to Weak form efficiencyA form of pricing efficiency where the price of the security reflects the past price and VARIABLE EXPENSESThose that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc. Non-production overheadA general term referring to period costs, such as selling, administration and financial expenses. OverheadAny cost other than a direct cost – may refer to an indirect production cost and/or to a non-production expense. Overhead allocationThe process of spreading production overhead equitably over the volume of production of goods or services. Overhead rateThe 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. Production overheadA general term referring to indirect costs. Semi-variable costsCosts that have both fixed and variable components. Variable costA cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services. Variable costingA method of costing in which only variable production costs are treated as product costs and in which all fixed (production and non-production) costs are treated as period costs. Variance analysisA 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. overhead costsoverhead generally refers to indirect, in contrast to direct, variable expensesExpenses that change with changes in either sales volume VarianceThe weighted average of the squared deviations from the applied overheadthe 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 budget variancethe difference between total actual overhead controllable variancethe budget variance of the two variance approach to analyzing overhead variances decision variablean unknown item for which a linear programming dependent variablean unknown variable that is to be predicted efficiencya measure of the degree to which tasks were performed fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; fixed overhead volume variancesee volume variance independent variablea variable that, when changed, will key variablea critical factor that management believes will labor efficiency variancethe 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 variancethe 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); manufacturing cycle efficiency (MCE)a ratio resulting from dividing the actual production time by total lead time; material price variancetotal 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); noncontrollable variancethe fixed overhead volume variance; overapplied overheada credit balance in the overhead account overheadany factory or production cost that is indirect to overhead application ratesee predetermined overhead rate overhead spending variancethe difference between total actual overhead and total budgeted overhead at actual predetermined overhead ratean 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 slack variablea variable used in a linear programming problem standard overhead application ratea predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate surplus variablea variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints total overhead variancethe difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead total variancethe difference between total actual cost incurred underapplied overheada 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 costa cost that varies in total in direct proportion variable costinga cost accumulation and reporting method variable cost ratiothe proportion of each revenue dollar variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity variancea difference between an actual and a standard or variance analysisthe process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences volume variancea fixed overhead variance that represents CovarianceA measure of the degree to which returns on two assets move in VarianceThe dispersion of a variable. The square of the standard deviation. Direct materials mix varianceThe variance between the budgeted and actual mixes of Factory overheadAll the costs incurred during the manufacturing process, minus the Fixed overheadThat portion of total overhead costs which remains constant in size Labor efficiency varianceThe difference between the amount of time that was budgeted Labor rate varianceThe difference between the actual and standard direct labor rates Materials price varianceThe difference between the actual and budgeted cost to Materials quantity varianceThe difference between the actual and budgeted quantities Production yield varianceThe difference between the actual and budgeted proportions Selling price varianceThe difference between the actual and budgeted selling price for Variable costA cost that changes in amount in relation to changes in a related activity. semi-strong-form efficiencyMarket prices reflect all publicly available information.
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