Standard Costing

Question 1

Standard

Answer 1

Unit amount

Question 2

Budget

Answer 2

Total Amount

Question 3

Total Budgeted Cost

Answer 3

• Should be Incurred for budgeted Production

Budgeted Production x Standard cost per unit

Question 4

Total Standard Cost

Answer 4

• Should have been incurred for actual production

Actual Production x Standard cost per unit

Question 5

Purpose of Standard Costing

Answer 5

1. Cost Control - lower cost = higher price (Primary Purpose)
2. Cost awareness
3. Motivation - performance Appraisal
4. simply Costing procedures
5. Pricing Decisions - SP = cost + profit
6. are useful in highlighting variance in management by exception

Question 6

Costing system

Answer 6

Actual
-M,L,OH x Actual unit Price

Standard
-M,L,OH x Standard unit Price

Normal

• M,L - Actual unit price
• OH - Standard unit price

Question 7

Variance

Answer 7

S > A = Favorable - Credit

S < A = Unfavorable - Debit

Question 8

Diposition of Variance

Answer 8

Fave - Debit
Unfave - credit

If significant - Cogs and inventory prorated
not significant - income summary or cogs(silent)

Question 9

DMV

Answer 9

Actual - Standard = TMV
or PV - QV = TMV

Price or Spending ; Quantity or Efficiency or usage
AP x AQ
SP x AQ
SP x SQ

Question 10

Price Var

Answer 10

Purchasing Dept

can be Purchase(silent) or Usage (see question or given)

Question 11

Quantity Var

Answer 11

Production Dept

Quality of materials
defective materials
unskilled worker
poor supervision

Question 12

DLV

Answer 12

Actual - Standard = TLV
Rate - Time = TLV

Rate or labor spending Var : Time or Efficiency

AR x AHR
SR x AHR
SR x SHR

Question 13

Labor spending or rate var

Answer 13

HR or supervisor or person responsible for setting labor rate

Worker skill
overtime premiums if premium is added to labor cost account

Question 14

Labor efficiency or time var

Answer 14

Production Manager

Worker skill
change in worker efficiency imposition of control measure in prod process

Question 15

Price Variance for 2 or more products

Answer 15

Long method

• Act price - std price = change in price
• Change in price x actual input = variance then total

or

Short method
                 Actual Cost 
- (Actual Input x Standard unit cost)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
                Price Variance

Standard unit cost = per material like 50kg/25kg = 2

Question 16

Mix Variance 2 or more products

Answer 16

Long method

• Actual Input - Standard Input = change in input
• Standard input = Actual total input x Std%
• Std% = Std Input/Material / total standard input
• change in input x standard cost

or

Short Method

Actual Input x Standard unit cost
     (Total actual input x ASIC)     \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
              Mix Variance

ASIC = Total Standard input cost
____________________
Total Standard Input

Question 17

Yield Variance 2 or more products

Answer 17

Long method

• Std output = total actual input x yield%
• yield% = std Production / std input
• Std production - actual production = var
• var x ASOC = yield Var
• ASOC = Std input cost / std production

or

Short Method

Total Actual Input x ASIC
( Standard Cost)
_______________________
Yield Variance

ASIC = Total Standard input cost
____________________
Total Standard Input

Question 18

TMV or TLV 2 or more

Answer 18

total = PV,MV, YV add or deduct according to fave or unfave

AMC/ALC = Actual Input x Actual Cost
SMC/SLC = Actual output x ASOC

ASOC = Standard Input Cost
____________________
Standard Prod or Output

Question 19

SHORT METHOD 2 or more

Answer 19

Price Var

              Actual Cost  - (Actual Input x Standard unit cost) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
            Price Variance

Mix Var

Actual Input x Standard unit cost
     (Total actual input x ASIC)     \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
              Mix Variance

Yield Var

Total Actual Input x ASIC
( Standard Cost)
_______________________
Yield Variance

ASIC = Total Standard input cost
____________________
Total Standard Input

Question 20

1 Way OH

Answer 20

TFOH = AFOH + SFOH

SFOH = var and fixed oh per unit x std hrs
std hrs = req hr / u x actual prod

Question 21

2 way oh

Answer 21

controllable Volume

AFOH BASH
(BASH) (SFOH)

                                          or

                                   Normal Capacity
                                          (Std hr)
                                    \_\_\_\_\_\_\_\_\_\_\_\_
                                              xx
                                    x  std FFOH/Unit
                                   \_\_\_\_\_\_\_\_\_\_\_\_\_\_
                                             xx

Question 22

BASH

Answer 22

std var/ unit x std hrs + Budg FOH (Std ffoh/unit

x Normal or budg hr

Question 23

BAAH

Answer 23

std var / unit x actual hr + Budg FOH (Std ffoh/unit

x Normal or budg hr

Question 24

3 way

Answer 24

Spending

AFOH
BAAH

Var eff Var

BAAH
BASH

Volume Var (same sa 2way)

BASH
SFOH

Question 25

4 way oh

Answer 25

Var Spending Var

Act var oh
std Var/unit x actual hr

Fixed spending var

Actual fixed OH
Budg Fixed Oh

Var eff Var

BAAH
BASH

Volume Var (same sa 2way)

BASH
SFOH