2219091
Description
Mind Map by Evgeniya Kachan, updated more than 1 year ago
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Created by Evgeniya Kachan
over 9 years ago
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Standard costing
- standard cost =
target/planned unit cost
- types of standards
- basic
- to show trends over time,
least useful
- to show trends over time,
least useful
- ideal
- in perfect conditions,
rarely achievable =>
adv motivational effect
- in perfect conditions,
rarely achievable =>
adv motivational effect
- attainable
- efficient, but not perfect conditions
- efficient, but not perfect conditions
- current
- based on current levels,
no incentive to improve
- based on current levels,
no incentive to improve
- basic
- needed to prepare budgets
- may be based on AC or MC
- types of standards
- variance analysis
- actual vs standard
- sales variance
- sales price
- effect on profit of selling at a different price
- (Actual price - Standard price) x Actual quantity sold
- (Actual price - Standard price) x Actual quantity sold
- effect on profit of selling at a different price
- sales volume
- effect on profit from the change in volume of sales
- (Actual quantity sold - Budgeted quantity sold) x Standard margin
- where standard margin is
- standard profit per unit (AC)
- standard contribution per unit (MC)
- standard profit per unit (AC)
- where standard margin is
- (Actual quantity sold - Budgeted quantity sold) x Standard margin
- AQS > BQS => favourable variance, profit higher
- effect on profit from the change in volume of sales
- total sales variance =
Sales price variance +
Sales volume variance
- sales price
- raw materials variance
- materials price variance
- (Actual quantity bought x Actual price) -
(Actual quantity bought x Standard price)
- standard price is usually set at mid-year standard,
resulting in fav variances in beg of year, adv var later on
- (Actual quantity bought x Actual price) -
(Actual quantity bought x Standard price)
- materials usage variance
- (Actual quantity used x Standard price) -
(Standard quantity for act prod x Standard price)
- (Actual quantity used x Standard price) -
(Standard quantity for act prod x Standard price)
- materials price variance
- labour variances
- labour rate variance
- difference in rate paid
- Actual hours x Actual rate -
Actual hours x Standard rate
- Actual hours x Actual rate -
Actual hours x Standard rate
- difference in rate paid
- labour efficiency variance
- difference in hours worked
- Actual hours x Standard rate -
Standard hours x Standard rate
- Actual hours x Standard rate -
Standard hours x Standard rate
- difference in hours worked
- labour rate variance
- variable
overhead
variances
- variable overhead
EXPENDITURE variance
- var OH cost per hour changed
- Actual hours x Actual rate -
Actual hours x Standard rate
- Actual hours x Actual rate -
Actual hours x Standard rate
- var OH cost per hour changed
- variable overhead
EFFICIENCY variance
- working fewer or more hours than
expected for actual production
- Actual hours x Standard rate -
Stand. hours 4output x Stand. rate
- Actual hours x Standard rate -
Stand. hours 4output x Stand. rate
- working fewer or more hours than
expected for actual production
- if variance is due to change in unit output,
impossible to calculate subvariances
- variable overhead
EXPENDITURE variance
- fixed overhead variances
- effect on profit of diff between
actual and expected fixed overheads
- effect on profit of diff between
actual and expected fixed overheads
- actual vs standard
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