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direct labour efficiency variancesit is the difference between the standard hours allowed for the actual production achieved and the hours actually
direct labour rate varianceit is the difference among the actual direct labour rate and the standard direct labour rate for the total hours
usefulness of variance analysiscarefully note that while prices are being charged to production it can be done at the actual or standard price for
price and quality aspect of varianceat this point it is serious to understand that all variance has two aspects a price aspect and a quantity aspect
assignment of variance in variance calculation in variances calculating the calculations require to be detailed sufficient hence the responsibility
importance of variance analysisvariance analysis is aimed at getting practical pointers to the purposes of off-the -standard performance hence
definition of variance analysisvariance analysis can merely be defined like the process of analyzing the difference between the actual cost and the
important points regarding to the variance analysisvariance reporting concentrates on both with favourable and unfavourable variances normally
variance analysisthis section describes how labour material and overhead variances are calculated and what causes every of those variances a chart is
disadvantages of standard costing1 the system of standard costing is very expensive to install a lot of money is spent in studying output
advantages of standard costing1 management via exception the standard costing is an example for management via exception by studying the variances
goal definition and communication - behavioural aspects of standardsgoal definitionthe desired goals should be clearly defined to individuals
motivation - behavioural aspects of standardsvariance analysis and standards setting requires to be carried out like it motivates managers and other
participation - behavioural aspects of standardsit has already been pointed out in the previous paragraph such standard costing systems would be more
goal congruence - behavioural aspects of standardsa perfect variance analysis and standard costing system must enhance goal congruence between asi
behavioural aspects of standardsbudgets and standards rely heavily on the people who have to work to meet them since the detailed nature of standard
standard cost cardit is a card record of the standard or expected costs in producing a specified output this gives the physical quantities of
prepare the material cost budget of products of a companyfor a company along with many products a periodic budget would be developed given as assume
standards and budgetsbudgets like you recall from the previous section are simply plans for expected future performance expressed in quantified
standards in standard costing1 the type of standard utilized basic attainable ideal current directly affects the level of the variances that can
attainable standards and current standardsalthough the standard must be set high sufficient that achievable and it has to be worked for attainable
types of standard coststhe standard cost set could be ideal basic attainable or currenti basic standards these are long term standards that would
standard costinga standard cost is a predetermined calculation of how much is supposed to be incurred under specific particular working conditions it
process of setting standards in standard costingestablishing correct a standard is extremely important due to the accuracy of the standards usually
standard costs establish the minimum desirable costswhen actual costs incurred exceed or else are below the standard costs we after that investigate