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Standard Cost System
A cost accounting system that uses cost standards for materials, labor, and overhead to control actual costs and analyze variances.
Favourable Variance
A financial term referring to a situation where actual costs are less than budgeted costs, or actual revenues exceed budgeted revenues.
Variable Overhead Efficiency Variance
A measure of the difference between the expected variable overhead based on standard costs and the actual variable overhead incurred.
Flexible Budget
A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.
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