|Variance minimization approach to tracking|
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Definition of Variance minimization approach to tracking
Variance minimization approach to tracking
An approach to bond indexing that uses historical data to
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 statistical methodology applied to a set of firms at a particular point in time.
An analysis wherein the alternatives under consideration will provide the firm
The variance between the budgeted and actual mixes of
the difference between the total actual fixed overhead and budgeted fixed overhead;
see volume variance
the number of hours actually worked minus the standard hours allowed for the production
The difference between the amount of time that was budgeted
(actual mix X actual hours X standard rate) - (standard mix X actual hours X standard rate);
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;
The difference between the actual and standard direct labor rates
(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 quantity variance
(actual quantity X standard price) - (standard quantity allowed standard price);
material yield variance
(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price);
Materials price variance
The difference between the actual and budgeted cost to
Materials quantity variance
The difference between the actual and budgeted quantities
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.
net realizable value approach
a method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either
the fixed overhead volume variance;
Optimization approach to indexing
An approach to indexing which seeks to Optimize some objective, such
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
Weighted sum of the covariance and variances of the assets in a portfolio.
Production yield variance
The difference between the actual and budgeted proportions
realized value approach
a method of accounting for byproducts or scrap that does not recognize any value for these products until they are sold; the value recognized
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
Risk premium approach
The most common approach for tactical asset allocation to determine the relative
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
approach to the determination of the optimal capital structure asserting that insiders in a
Stratified sampling approach to indexing
An approach in which the index is divided into cells, each
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
In an indexing strategy, the difference between the performance of the benchmark and the
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
Specifies the permitted minimum or maximum quantity of securities that can be delivered to
a fixed overhead variance that represents
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