Section 5: Cost Accounting & Performance Measurement Flashcards
Standard Cost
The unit purchase price of DM.
differences btw standard cost and actual cost produce DM price variances
Standard Quantity
The # of units of DM used to produce each unit of inventory. Diff. btw standard qty allowed and actual qty used produced DM usage variances
Standard Rate
The hourly rate of pay for DL.
Diff. btw standard rate and actual rate produce DL Rate Variances
Standard Hours
The # of hrs. of DL used to produce each unit of inventory.
Diff. btw standard hrs allowed and actual hrs used produce DL Efficiency Variances
Predetermined O/H Rate
The Amount of O/H to apply.
Diff. btw applied O/H and actual O/H produce O/H Variances
Variance Analysis
SAD
Standard - Actual = Difference
\+ = good - = bad
DM Price Variance (DMPV)
Purchasing
Actual Quantity Purchased (Std Price - Act Price)
While in the factory, can I control qty used? Yes, use actual quantity
DM Usage Variance (DMUV)
Production
Standard Cost (Standard Quantity Allowed - Actual Quantity Used)
While in the factory, can i control the price? NO, use standard cost
DL Rate Variance (DLRV)
Personnel
Actual Hours * (Standard Rate - Actual Rate)
Can i control the hours worked? YES
DL Efficiency Variance (DLEV)
Production
Std Rate(Std Hrs. Allowed - Act Hrs Used)
Can i control the pay rate in the factory? NO
Mfg. O/H (SEV)
Spending
Efficiency
Volume
Standard Allowed for Actual
Actual Production * Std. Hrs allowed
Four Variance Approach
Fix Spending
Variable Spending
Efficiency
Volume
Three Variance Approach
Spending
Efficiency
Volume
(SEV)
Two Variance Approach
Budget (Controllable)
Volume (Uncontrollable)
Budget = Actual + FBE@Actual + FBE@Std.
