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2219091
Standard costing
Description
Mind Map on Standard costing, created by Evgeniya Kachan on 08/03/2015.
Mind Map by
Evgeniya Kachan
, updated more than 1 year ago
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Created by
Evgeniya Kachan
over 9 years ago
504
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Resource summary
Standard costing
standard cost = target/planned unit cost
types of standards
basic
to show trends over time, least useful
ideal
in perfect conditions, rarely achievable => adv motivational effect
attainable
efficient, but not perfect conditions
current
based on current levels, no incentive to improve
needed to prepare budgets
may be based on AC or MC
variance analysis
actual vs standard
sales variance
sales price
effect on profit of selling at a different price
(Actual price - Standard price) x Actual quantity sold
sales volume
effect on profit from the change in volume of sales
(Actual quantity sold - Budgeted quantity sold) x Standard margin
where standard margin is
standard profit per unit (AC)
standard contribution per unit (MC)
AQS > BQS => favourable variance, profit higher
total sales variance = Sales price variance + Sales volume variance
raw materials variance
materials price variance
(Actual quantity bought x Actual price) - (Actual quantity bought x Standard price)
standard price is usually set at mid-year standard, resulting in fav variances in beg of year, adv var later on
materials usage variance
(Actual quantity used x Standard price) - (Standard quantity for act prod x Standard price)
labour variances
labour rate variance
difference in rate paid
Actual hours x Actual rate - Actual hours x Standard rate
labour efficiency variance
difference in hours worked
Actual hours x Standard rate - Standard hours x Standard rate
variable overhead variances
variable overhead EXPENDITURE variance
var OH cost per hour changed
Actual hours x Actual rate - Actual hours x Standard rate
variable overhead EFFICIENCY variance
working fewer or more hours than expected for actual production
Actual hours x Standard rate - Stand. hours 4output x Stand. rate
if variance is due to change in unit output, impossible to calculate subvariances
fixed overhead variances
effect on profit of diff between actual and expected fixed overheads
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