purchased to detect any unusual deviations from its benchmarks. Recommendation: Standard costing is a great tool for this company and they must continue to use it. It will aid in helping management analyze actual costs versus standard costs. The variances that can be calculated will help them make future decisions in regard to cost cutting and also many other things such as what quality materials to use in production. Analysis: During May Direct materials per unit = 110‚000 square
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these three possibilities‚ I will address the company’s desire to finish the warehouse expansion in 40 weeks. To do this‚ I used the expected time formula‚ the variance formula‚ standard variance and the “z score.” In the formulas below‚ the optimistic outlook is “a”‚ the most likely is “m”‚ and the pessimistic is “b‚” ℴ is standard variance and the z score is used to find the percentage the warehouse is able to be built in 40 weeks. Additionally‚ the actual expected time is 43 weeks‚ shown below is
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Chapter 8: Cost Estimation Strategic Role of Cost Estimation * Cost Estimationthe development of a well-defined relationship b/t a cost object and its cost drivers for the purpose of predicting the cost * Facilitates strategic mgmt is 2 ways * Helps predict future costs * Helps identify key cost drivers for a cost object and which driver is most useful * Using Cost Estimation to Predict future costs * Strategic mgmt requires accurate estimates for the
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$16‚650 Budgeted Profit $606‚350 Hours billed variance =(Actual Hrs billed - Budget Hrs billed)*Budgeted Avg billing rate $278‚100 F Average billing rate variance =(Actual Avg billing rate - Budget Avg billing rate)*Actual Hrs billed ($246‚090) U # of consultants variance =(Budget # of consultants - Actual # of consultants)*Budget avg compensation per consultant ($133‚200) U Compensation rate variance =(Budget Avg compensation per consultant - Actual Avg compensation
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Determine the revenue variance from Arcadia Hospital’s 2005 budget. Is the variance positive or negative? Upon reviewing the Arcadia Hospital Income Statement for the year of 2005‚ I would say that the variance is negative because the actual budget for 2005 $568 million minus the budget of $596 million equals a negative amount of $28 million under budget‚ which means less revenue. In other word‚ revenues were $28 million below budget‚ therefore the variance is negative. Which is desirable
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coefficient estimates. However‚ it typically causes OLS to no longer be the minimum-variance estimator. The error term causes the independent variable to fluctuate more‚ increasing their variance. Moreover‚ the OLS estimates of the standard errors become biased‚ leading to unreliable hypothesis testing. Heteroskedasticity increases the variance of the estimated coefficients variance‚ but OLS underestimates the variance. -impure heteroskedasticity caused by an omitted variable will have possible specification
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higher variance. If we compare both stocks‚ Reynolds is riskier than Hasbro in this case. The higher variance indicates higher chance that the actual return on Reynolds will deviate from the expected return. S&P 500 REYNOLDS HASBRO Mean/Average 0.574333 1.874833 1.183833 Variance 12.972333 87.730541 65.866763 Standard Deviation 3.601713 9.366458 8.115834 Answer 2. At individual stock level‚ Reynolds fluctuates more than Hasboro as it has higher Standard Deviation and higher variance. After
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is the square root of the variance. The population standard devia¬tion is denoted by σ. Like the variance‚ the standard deviation utilizes the sum of the squared deviations about the mean (SSx). It is computed by averaging these squared deviations (SSX/N) and taking the square root of that average. One feature of the standard deviation that distin¬guishes it from a variance is that the standard deviation is expressed in the same units as the raw data‚ whereas the variance is expressed in those units
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50 55 60 65 70 75 80 85 90 95 100 Q1 : 44.5 % Q2 : 58.0 % Q3 : 69.0 % Lecture 12 - CHEE 231 – Fall 2013 – Prof. Girard-Lauriault 2 Sampling Distribution‚ unknown Variance While we know that X is normally distributed (Central Limit Theorem)‚ it is important to have a good point estimate on σ to use the z distribution as a probability distribution function for X . Rule of thumb: If n≥30 the normal approximation
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Assignment 1: Variance Analysis Report In order to perform a variance analysis report Jenkins calculated the actual revenues and expenses and found the difference which was $296‚610 in profits. Then Jenkins did the same with budgeted values and found the budgeted profits to be $606‚350. The variance amount in turn is $309‚960 under budget. Also‚ the variance amount for revenues is $32‚100. This number is favorable due to the fact that they made more than what they had budgeted for. But on the contrary
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