
1.
Variable Cost:
The cost which fluctuates on the basis of the output level produced. The variable cost and output shares a direct relationship.
Denominator-Level:
Denominator-level is a term used to depict the capacity level that is considered for evaluation of business operations or production process. It uses theoretical capacity and practical capacity to analyze the production and normal capacity utilization and
. The denominator level used for allocation of variable
2.
Spending Variance:
It indicates the amount of actual cost incurred for actual production over the estimated or expected cost for the same level of production.
Efficiency Variance:
It indicates the quantity of actual input over the budgeted input quantity at the budgeted rate.
Flexible-
It reports the actual results over the results of flexible budgets and flexible budgets are those budgets which indicate the budgeted values for actual output.
To prepare: The
3.
To explain: The overview of results calculated in ‘part 2’.

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Chapter 8 Solutions
Cost Accounting
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