Standard costing

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Standard costing : 

Standard costing

Standard costing: 

Standard costing Limitations of historical costing Historical cost vs standard cost

Standard costing: 

Standard costing Standard cost : a predetermined cost which is calculated from managements standards of effecient operation and the relevant necessary expenditure. It may be used as a basis for price fixing and cost control through the analysis of variances.

Standard costing: 

Standard costing Standard cost vs estimated costs Standard costs vs budgets

Standard costing: 

Standard costing Advantages of std costing : Managerial planning Co-ordination Cost control Record keeping Cheap and efficient means of costing Helps fix price & formulate policies Acts as incentive to employees

Standard costing: 

Standard costing Basic standards Normal standards High standards Low standards Attainable standards

Standard costing: 

Standard costing Standards developed for mainly : Materials Labour Overheads Revision of standards

Standard costing variance analysis: 

Standard costing variance analysis Whats a variance ? Why analyse variance ? Computation of individual variance Determining the cause of each variance

Variance analysis: 

Variance analysis MATERIAL VARIANCE Material price variance = (Actual price – std price) * std price Material usage variance = (Actual Quantity – Std Quantity)* Std price MATERIAL COST VARIANCE = MATERIAL PRICE VARIANCE + MATERIAL USAGE VARIANCE

Standard costing: 

Standard costing