Standard costing 0.0 / 5 ? AccountingSandard costingA2/A-levelAQA Created by: alexCreated on: 26-02-14 16:27 What does standard costing do? Sets out a pre-determined/budgeted cost for materials, labour and overheads in advance of production. 1 of 15 Name three ways standard costing can be used - Help in decision making - planning - controlling costs 2 of 15 What is a variance? A calculated difference between standard cost/revenue against actual cost/revenue 3 of 15 With standard costing, what can variances and sub-variances be calculated for? Materials labour and overheads. 4 of 15 Formula for material variance (STD QTY X STD PR) - (ACT QTY X ACT PR) 5 of 15 Materials price variance ACT QTY (STD PR - ACT PR) 6 of 15 Material usage variance STD PR (STD QTY - ACT QTY) 7 of 15 Labour variance (STD HR X STD RATE) - (ACT HR X ACT PR) 8 of 15 Labour rate variance ACT HR (STD RATE - ACT RATE) 9 of 15 Labour efficiency variance STD RATE (STD HR - STD HR) 10 of 15 SALES VARIANCE (STD QTY X STD PR) - (ACT QTY X ACT PR) 11 of 15 Sales volume variance STD PR (STD QTY - ACT QTY) 12 of 15 Sales price variance ACT QTY (STD PR -ACT PR) 13 of 15 What are interrelationships of variances Where one variance has no effect on another. 14 of 15 Variances can appear in the reconciliation statement which may take the form of what? - Profit reconciliation statement -Cost reconciliation statement - Sles reconciliation statement 15 of 15
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