Documente Academic
Documente Profesional
Documente Cultură
Presentation Outline
I. Types of Standards II. Variance Calculations III. Investigation of Standard Cost Variances
I. Types of Standards
Ideal Standards Can only be attained under the best circumstances. No allowance for machine breakdowns or work interruptions Attainable Standards Tight but attainable standards. Allows for machine downtime and employee rest periods.
XXX
Materials Price Variance [(AP-SP)AQ] XXX or XXX Accounts Payable (AQ x AP) XXX
XXX
Materials Quantity Variance [(AQ-SQ)SP] XXX or XXX Raw Materials (AQ x SP) XXX
Work in Process (SH x SR) Labor Rate Variance [(AR-SR)AH] Labor Efficiency Variance [(AH-SH)SR] Wages Payable (AH x AR)
A. Management by Exception
Most managers take a management by exception approach and investigate only those variances that they deem to be exceptional. The absolute dollar value of the variance or the variance as a percent of actual or standard cost is often used as the criterion.
Summary
Ideal vs. Attainable Standards Material Variances Labor Variances Overhead Variances