STANDARD COSTING

Question 1

How to get MPV and What is the Journal Entry?

Answer 1

MPV can be computed by arriving at the difference between:
AQ x AP
AQ x SP
DEBIT:
AQ Purchase x Std. Price
MOV unf

CREDIT: MPV- FAV
AP
AQ x AP

Question 2

How to get MQV and what is its JE?

Answer 2

AQ X SP
SQ X SP

JE:
SQ x SP
MQV unfav
MQV Fav
RMI
Actual Qty used x std price

Question 3

How to get the LRV? LEV?

Answer 3

AH x AR
AH x SR
SH x SR

Question 4

Illustrate the 1 way, 2 way, 3 way and 4 way FOH Variances

Answer 4

1. ACTUAL [ AVR x AH + AFR X AH]
2. BAAH [AVR x AH + BFC]
3. BASH [AVR X SH +BFC]
4. STD [ SVR X SH + SFR X SH]

1 VS 2 SPENDING VARIANCE
IT CAN BE BROKEN DOWN INTO VAR OH SPENDING VARIANCE AND FX SPENDING VARIANCE
2 VS 3 EFFICIENCY VARIANCE
3 VS 4 VOLUME VARIANCE
1 VS 3 CONTROLLABLE VARIANCE
1 vs 4 TOTAL OH VARIANCE
EFFICIENCY VARIANCE CAN ONLY BE BROKEN DOWN as VARIABLE since BFC regardless will always be incurred

Question 5

How to reconcile the Income under Absorption Costing and Variable Costing?

Answer 5

VC NI
+/- CHANGE IN INVTY X FFOH
EQUALS ACNI