Please enable JavaScript.
Coggle requires JavaScript to display documents.
Standard costing & variance analysis (Cal variance (Flexing the budget…
Standard costing & variance analysis
Costing
Pre-determined & realistic targets
Record keeping for period, job cards, batch pricing, judging performance & marginal, physical & financial measure
Standard = basic, ideal, attainable, current
Analysis
Comparing actual cost with standard cost
Planning better for future
Reasons = inefficiency, inability, lack mot, incorrect, poor communication,
Material costs & volumes, labour costs & volumes, variable overheads & usage levels, fixed overheads, sales prices & volumes
Cal variance
Material, labour & variable overheads
Fixed overheads & sales
Cost card example p.61
Table 13 & 14 p. 62
Flexing the budget
Marginal costing
Assumptions
Table 15 p. 63
Differences in prices
Differences in usage of resources
Mat cost var
Price & quantity
price
(Pa - Ps) x Qa
MPV = AU X Ps kg - QA kg
Usage
MU / QV = Ps kg x(Qs - Qa)
Lab var
Ra x Ha - Rs x Hs
rate
LRV = Ha x (Rs - Ra)
Efficiency
LEV = Rs x (Ra - Ha)
Idle time = Rs x (Ha - Hp) Act 6.7
v overhead var
P. 70 workings
exp
Differences between B & Actual
VOEV = Ha (VOs - VOa)
Effic
VOEV = VOs x (Hs - Ha)
Example p. 72 absorption
F overheads var
Marginal costing
Should not vary
FOEV = BF - AF
Differ on absorption costing
Sales var
Methodology used
Pri var
SPV = AsV x(ApU - SpU)
Sal vol
SVV = ScU x (Asv - Bsv)
Var formula
P. 74 - 75 exam revision
Rec
Variances explain differences
Table 16 good example p.75
Investigate var
Management
Important performance
Flagging
The relationships
Quality control techniques
Ways to improve
Feedback
Aid control
Timely & regular
Up to date information
Adjust future plans
Forecast & market conditions
A & D var anal
Identify problems
Who or which
Drawbacks
Keeping standards updated
Specifying standards
Over-simplifying results
Responsibility & inter-relationships
Cost-cutting mentality