Standard Costing

Characteristics

Why?

Standards

Variances

Activity

Spending

Overview

Spending variances

Price

Quantity

Fixed OH variances

Budget

Volume

Reconciling variances

Favourable

Unfavourable

Journals

Material

Labour

Overhead

Variable

Fixed

Who is responsible?

Advantages

Manage by exception

Std's = benchmarks

Simplify accounting

Responsibility accounting

Problems

Outdated Std's

Labour = varialbe?

Favourable = bad?

Dysfunctional decisions

Meet std's = sufficient?