Reference no: EM132906009

Unit - Advanced management accounting LO3 Analyze actual and standard costs to control and correct variances

Actual costs:

What does this mean? How is actual cost determined? How does this differ to estimated or standard costs?

Standard costs:

What does this mean? How is standard cost determined? How does estimating standard costs result in variances? 

Variances:

Variance analysis as a concept and a technique. Negative and positive variances. How can a negative variance be considered a positive and vice versa?

Controlling and correcting variances:

Integrating variance analysis into budget monitoring across an organization. Reporting systems for monitoring and controlling variances. Schedule variance vs cost variance.

Question:

P3 Analyze the concept of variance analysis in its importance for organizational budget control.