标准化成本英文

1、Chapter 6:Standard costing and variance analysis Standard Costing & Variance AnalysisManagement Accounting Control Systembroad approach to control systemsi.e. financial and non-financial controlsthis chapter: examines detailed financial controlsstd.cost & revenue centresprofit & investment centres(t

2、his chp.)(chp 5 & 6).Standard Costing & Variance AnalysisFinancial control systems operated in std. cost centresstd. costing system (Variance analysis)enables any deviations from budgets to be analysed in detailable to measure output & input required to produce each unit of output, and hence control

3、 cost more effectively especially for manufacturing activitiesStd. cost: predetermined costs on per unit basisBudgeted cost: predetermined cost on entire activityE.g.: Budgeted outputs = 10,000 unitsStd. cost is 3 p/unitHence, budgeted cost is = 3 x 10,000 units = 30,000.1)Standard Costing SystemStd

4、. Costing Systemsuitable for manufacturing organisations- because activities are repetitive & series of common operations- because output can be measured with input being specified to produce p/unit output- applied to organisations that produce large product range with few number of operations .Stan

5、dard Costing SystemAn overview of a standard costing system.Standard Costing SystemIn establishing variances, comparison is made between total std. cost & total actual cost per operation costhence, variances are allocated to responsibility centres (operations) and so managers are responsible for var

6、iances in own responsibility centres.Effective controlCannot compare std. product cost with actual product costas each product may involve combination of different operations so which manager is responsible for variance and how can control be achieved effectively? Once variances are allocated to res

7、ponsibility centres, managers analyse according to Price & Quantity Investigation is done as to why variance occurred so that corrective actions can be taken Eg.: Maybe excessive usage of DM, and if so why?.Standard Costing System: ExampleOperation of a standard costing systemComparison is made betw

8、een total std cost & total actual cost to establish variances according to operations / responsibility centres .2) Std. CostDirect Material Std.Direct Labour Std.Man.O/H Std.Std. Qty (of input) xStd.Time / HoursStd. Price (of input) x Std. Wage RateFlexible O/HFixed O/HStd.Hours Produced -largely x

9、Hourly O/H Rateindependent ofchanges instd.hours producedactivity= actual output (units)-remains constantx std.hour / time p/unit producedover a wide rangeof activities in short term- std. hours produced is an output measure- flexible budget allowances are based on std. hours produced.3) Purposes of

10、 Std Costing SystemProvides prediction of future costs that can be used for decision makingProvides a challenging target for individuals to achieveclearly defined target increases motivation increases performancethese challenging targets are quantitative and motivates higher performance than non-qua

11、ntitative targetsAssist in budget setting and evaluating managerial performanceAct as control devicewhen std. is compared to actual variances are highlighted, analysed, investigated corrective actions are taken to adjust std. performanceHelps managers to control costs at own responsibility centres &

12、 to be more accountable as variances are allocated to responsibility centres.4) Variance AnalysisStd Variable / Marginal Costing SystemStd Absorption Costing SystemProfit Variance (diff. bet. Budgeted & actual profit)Selling & Dist.cost var.Total production cost var.Total sales margin var. Sales mar

13、gin Sales price var. margin. volume var.Total DM Var.Total DL Var.Total VariableFixed O/H Exp. Var.O/H Var.Material PriceWage / LabourVariableVariable Efficiencyvar.rate var.Exp. var.var. & &Material UsageLabour Efficiencyvar.var.(a) Material Price VarianceRefer to E.g. 17.1 (pg 426)(Std Price Actua

14、l Price) x Actual Quantity Purchased(SP AP) AQPMaterial A(10 - 11) x 19 000kg = 19 000 Adverse (A)Material B(15 - 14) x 10 100kg = 10 100 Favourable (F) Adverse: maybe because general price increase; external conditions in market; failure to source for correct suppliersFavourable: could also be sour

15、ce of supplies of inferior quality hence cheaper; general price decrease; manage to secure good but cheap supplies.(b) Material Usage Variance(Std Quantity for Actual Output Actual Quantity for Actual Output) x Std Price(SQ AQ*) SP Material A(2 kg x 9 000) - 19 000 x 10 = 10 000 AMaterial B(1 kg x 9

16、 000) - 10 100 x 15 = 16 500 AAdverse: careless handling of material by worker; wastage; purchase of inferior material and therefore wastage; changes in methods of production.Favourable: effective & efficient material handling; better production methods to decrease wastage of materials etc.* -So eva

17、luation is done on budgeted figures but actual situation- More comparable to actual results as condition is same- Manager also evaluated on more valid / realistic results.(c) Total Material VarianceStd Material Cost for Actual Output Actual Material Cost for Actual OutputSMC - AMC Material A(20 x 9

18、000 units) - 209 000 = 29 000 AMaterial B(15 x 9 000 units) - 141,400 = 6,400 AorMaterial Price Variance + Material Usage VarianceMaterial A= 19 000A + 10 000A =29 000AMaterial B= 10 100 F+ 16 500 A = 6 400 A .d) Labour / Wage Rate Variance(Std Rate Actual Rate) x Actual Hours Worked(SR AR) x AH = (

19、9 - 9.60) x 28 500 hrs = 17 100A .e) Labour Efficiency Variance(Std Hours for Actual Output Actual Hours for Actual Output) x Std Rate(SH AH) x SR = (3 hrs x 9 000) 28 500 x 9 = 13 500AAdverse: poor production scheduling; changes in quality control; changes in production method / process; new equipm

20、ent / tools; inferior material; different grades of labour; improper usage of machinery .f) Total Labour VarianceStd Labour Cost for Actual Output Actual Labour Cost for Actual OutputSLC - ALC = (27 x 9 000 units) - 273 600 = 30 600 AorLabour Rate Variance + Labour Efficiency Variance = 17 100 A + 1

21、3 500 A = 30 600 A.g) Variable O/H Expenditure Variance (Budgeted Flexed Variable O/H Rate for Actual Direct Labour Hours) (Actual Variable O/H Rate for Actual Direct Labour Hours) BFVO AVO = (2 x 28 500hrs) - 52 000 = 5 000F .h) Variable O/H Efficiency Variance(Std Hours for Actual Output Actual Ho

22、urs for Actual Output) x Std Variable O/H Rate(SH AH) x SR = (3 hours x 9 000) - 28 500 x 2 = 3 000A .i) Total Variable O/H VarianceStd Variable O/H Cost for Actual Output Actual Variable O/H Cost for Actual OutputSVOC AVOC = (6 x 9 000 units) - 52 000 = 2 000 ForVariable O/H Expenditure Var. + Vari

23、able O/H Efficiency Var. = 5 000 F + 3 000 A = 2 000 FVariable O/H: indirect labour; indirect material; electricity; maintenancevariances due to change in these prices and how efficiently they are usedvariable o/h varies with direct labour hours, machine hours or output ut.j) Fixed O/H ExpenditureBu

24、dgeted Fixed O/H Actual Fixed O/HBFO - AFO = 120 000 - 116 000 = 4 000 F- Fixed O/H are fixed for the period in which it is incurredhence, fixed o/h does not change towards changes in level of activity over the short term- BUT other causes of changes include changes in price such as changes in salar

25、ies of supervisors / need to get additional supervisorshence uncontrollable in short term.k) Sales Margin Price Variance(Actual Contribution Margin p/unit Std Contribution Margin) x Actual Sales Volume(AM* SM) x AV = (22* - 20) x 9 000 units = 18 000 F* (Actual sales price Budgeted sales price) + St

26、d Contribution Margin = (90 - 88) + 20 = 22.l) Sales Margin Volume Variance(Actual Sales Volume Budgeted Sales Volume) x Std Contribution Margin(AV BV) x SM = (9 000 units 10 000 units) x 20 = 20 000 A - Based on contribution margin and not sales price - Affected through competitors price and recess

27、ion.m) Total Sales Margin VarianceActual Contribution Margin Budgeted Contribution MarginACM BCM = 198 000* - 200 000* = 2 000A* Actual Sales Revenue Std Variable Cost for Actual Sales Volume(90 x 9 000 units) (68 x 9 000 units) = 198 000* Budgeted Sales Revenue Budgeted Variable Cost(88 x 10 000 un

28、its) (68 x 10 000 units) = 200 000orSales Margin Price Var. + Sales Margin Volume Var. = 18 000 F + 20 000 A = 2 000A.6) Reconciling Budgeted Profit & Actual Profit through Std Variable / Marginal Costing SystemBudgeted net profit 80 000Total Sales variances:Sales margin price 18 000 FSales margin v

29、olume 20 000 A 2 000 ATotal Direct cost variances:Material: Price 8 900 A Usage 26 500 A 35 400 ALabour: Rate 17 100 A Efficiency 13 500 A 30 600 ATotal Manufacturing overhead variances:Fixed overhead expenditure 4 000 FVariable o/h expenditure 5 000 FVariable o/h efficiency 3 000 A 6 000 F 62 000 A

30、Actual profit 18 000.17.10aStandard absorption costing1. For financial accounting (stock valuation) fixed overheads must be allocated to products.This results in a volume variance.2. Fixed overhead rate = budgeted fixed overhead = 12 per unitbudgeted activity (10 000 units)or 120 000 /30 000 hours = 4 per standa