Standard Costing

Question 1

For DM, DL, VOH
- mnemonics

Answer 1

APAK SAPAK
(AP x AQ) (SP x AQ)

SQ → based on allowed (flexible budget)
If VOH (SP → based on labor not on units)

Question 2

If silent, DM price variance is?

Answer 2

at point of purchase

Question 3

For FOH
- formula

Answer 3

Actual | Budgeted | SPSQ

SQ → based on allowed (flexible budget)
SP → based on labor not on units
Budgeted → constant (master budget)

Question 4

What type of variance will be considered
- controllable
- uncontrollable

Answer 4

Controllable = spending and efficiency
Uncontrollable = volume

Question 5

Journal Entry for Variances

Answer 5

Dr. Inventory / COGS (at standard costs)
Dr. Unfavorable Variance (A > S)

Cr. Cash / Payable (at actual costs)
Cr. Favorable Variance

Question 6

Formula
- AFOH, BAAH, BASH, SFOH

Answer 6

AFOH less BAAH = Spending Variance
BAAH less BASH = Efficiency Variance
BASH less SFOH = Volume Variance

Question 7

How to get BAAH?

Answer 7

Budgeted FOH + (SP x AQ)

since “actual”

Question 8

How to get BASH?

Answer 8

Budgeted FOH + (SP x SQ)

since “standard”

Question 9

GP Variance = GP (Actual / Current) less GP (Budget / Previous)

What if actual GP is higher? Is it favorable or unfavorable?

Answer 9

Favorable since mas malaki yung GP this year

Question 10

Change in Sales and Cost
- how to get Sales Price Factor
- how to get Cost Price Factor
- how to get Volume Factor (Sales and Cost)

Answer 10

APAK SAPAK (same as DM, DL, VOH)

Actual = current year
Standard (Budget) = previous year