Standard Costing Flashcards
marginal
Variable
Standard Costing
Is a carefully predetermined unit cost which is prepared for each cost unit The standard becomes the target Analysing variances can help managers focus on areas requiring the most attention, this is called managing by exception
Standard Cost Card
Ideal Standard
Perfect conditions Everything goes as expected Unattainable
Attainable Standard
A realistic target Most common
Current Standard
What is happening now No incentive for improvement
Basic Standard
Original standard first set
Variable Cost Variances
Idle Time Variances
Always adverse Can be due to; Shortage of work Shortage of material Machine breakdown
Reconciling Actual Contribution with Budgeted Contibution
Put budgeted contribution at the top and then 1 sales volume contribution variance 2 sales price variance 3 direct material price 4 direct material usage 5 direct labour rate 6 direct labour efficiency 7 variable production overhead 8 variable production overhead efficiency Actual contribution at the bottom
Price/ Cost/ Expenditure Variances
FORMULA
budgeted price per kg/ hour/ unit
/
actual price per kg/ hour/ unit
x
actual qty
Usage/ Efficiency Variances
FORMULA
Budgeted Qty Hours/ kg/ units
-
actual qty hours/ kg/ units
x
standard (budgeted) price
Sales Volume Contibution Variance
actual sales volume
-
budgeted sales volume
x
standard contribution per unit
Sales Price Variance
What it should have been (actual units x bud SP)
-
actual sales
Variable Overhead Efficiency
what it should be (no of units x no of hours)
-
what it was
x
cost per hour
