Problem – 12 (Variance) In standard Costing, certain “ratios” are used to illustrate effective use of the resources of the company. Define these ratios.

Slides:

Advertisements

Similar presentations

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 9 Recording and Evaluating Conversion Process Activities.

Advertisements

Standard Costing and Variance Analysis

Using Budgets for Planning and Coordination

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 10 Standard Costing, Operational Performance Measures,

Copyright © 2008, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Chapter Eleven Standard Costs and the Balanced Scorecard.

1 PowerPointPresentation by PowerPoint Presentation by Gail B. Wright Professor Emeritus of Accounting Bryant University © Copyright 2007 Thomson South-Western,

Problem- 4 (Material & Labour) The following details relating to the product ‘X’ during the month March, 2011 are available. You are required to compute:

Standard Costing and Variance Analysis

Cost Variances for Fixed and Variable Overhead Variances for Variable Overhead Variances for Fixed Overhead.

CHAPTER 20 MANAGEMENT ACCOUNTING: The Manufacturing Business.

Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Standard Costs and Variance Analysis Chapter Ten & Eleven.

Direct Cost Variance and Management Control

Lecture 6 Cost Variances for Direct Costs. The derivation of the price and efficiency variances AP ACTUAL COST AQ AP = actual price per unit of input.

Chapter 10 Standard Costing: A Managerial Control Tool

VARIANCE ANALYSIS 1 LECTURE 8.

Budgets and Variances continued: Production variances.

Introduction Overhead costs are a major cost area for many organisations. Planning and control of overhead costs is an ongoing challenge to managers.

Chapter 12 – Standard Costs: Direct Labor and Materials

ACCOUNTING FOR MANAGEMENT DECISIONS

Fundamentals of Accounting II

Flexible Budgets and Variance Analysis

Chapter 23 Flexible Budgets and Standard Cost Systems

Dr Gagan Pareek alias Dr Harish Pareek M.Com, A.I.C.W.A, PhD Area of Expertise : Accounting & Finance, Credit Risk Management.

1 Budgets and budgetary control Lecture 2 Semester B Dr. Haider Shah Dr. George H. Papadopoulos.

Deluxe Linens Deluxe Linens makes high-end sheets which they sell to major retail stores and on their website. The budgeted costs for materials and direct.

File G: Value Stream Cost Analysis Exercise Using Simplified File F Template.

© The McGraw-Hill Companies, Inc., 2005 McGraw-Hill/Irwin 24-1 STANDARD COST SYSTEMS Chapter 24.

BA 116 WFRU. Mechanics - Grouping Form SIX groups with 8-9 people per group Each group must have an answer sheet and scratch paper for the problems.

Standard Costing and Variance Analysis

1 Module 3 Costing Techniques. 2 (3.1) MARGINAL COSTING (A) Important Formulae Contribution (c) = Sales (s) – Variable cost (v) N= No. of units sold,

Productivity Improve Productivity, Reduce Costs, Improve Profits.

Problem -1(Material) S. V. Ltd., manufactures by mixing three raw materials. For every batch of 100 kg of BXE, 125 kg of raw materials are used. In April.

15-1 HANSEN & MOWEN Cost Management ACCOUNTING AND CONTROL.

18-1 Prepared by Douglas Cloud Pepperdine University Prepared by Douglas Cloud Pepperdine University Productivity Measurement and Control.

1-1 1 McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved.

Chapter 9 Standard Costing: A Functional-Based Control Approach

© 2012 McGraw-Hill Education (Asia) Garrison, Noreen, Brewer, Cheng & Yuen Standard Costs and Operating Performance Measures Chapter 12.

© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.

Flexible Budgeting Chapter 07, 08

Fundamental Managerial Accounting Concepts Thomas P. Edmonds Bor-Yi Tsay Philip R. Olds Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights.

Direct Labor Variances Managerial Accounting Prepared by Diane Tanner University of North Florida Chapter 44.

1 Brenda Mallouk Standard Costing I Management Accounting One.

Activity-Based Costing and Management Management Accounting: The Cornerstone for Business Decisions Copyright ©2006 by South-Western, a division of Thomson.

The Islamic University –Gaza

© The McGraw-Hill Companies, Inc., 2002 McGraw-Hill/Irwin Standard Cost Systems Chapter 23.

Chapter 8 © The McGraw-Hill Companies, Inc., 2007 McGraw-Hill /Irwin Standard Costs.

© 1999 Prentice-Hall Canada Inc. Slide 31 Optimal Use of Limited Resources when something constrains or limits operations (labour hours, machine hours,

Standard Costs and Operating Performance Measures.

Part 1 Study Unit 7 Review Jim Clemons, CMA.

Cost Management ACCOUNTING AND CONTROL

9-1 Standard Costing: A Functional-Based Control Approach 9.

Chapter 23 Flexible Budgets and Standard Cost Systems.

Strategic Variance Analysis Ms. Chathuri Senarath University of Kelaniya.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. Chapter 23 1.

Fundamentals of Management Accounting CIMA C01 –.

DEVRY ACCT 346 W EEK 8 F INAL E XAM Check this A+ tutorial guideline at For more classes.

Performance Evaluation

STANDARD COSTS AND VARIANCE ANALYSIS FOR DECISION MAKING

Foundations and Evolutions

Standard Cost Chapter Ten

Standard Costing and Variance Analysis

Flexible Budgets, Standard Costs, and Variances Analysis Chapter 8

Flexible Budgets, Standard Costs, and Variances Analysis Chapter 8

The Master Budget and Flexible Budgeting

Flexible Budgets, Standard Costs, and Variances Analysis Chapter 8

Flexible Budgets, Standard Costs, and Variances Analysis Chapter 8

Flexible Budgets, Standard Costs, and Variances Analysis Chapter 8

Cost Accounting for Decision-making

Presentation transcript:

Problem – 12 (Variance) In standard Costing, certain “ratios” are used to illustrate effective use of the resources of the company. Define these ratios and illustrate your answer by using the following figures, which are in respect of a four-week period. In this period there was a special one day holiday due to national event. Standard Working = 8 hours per day & 5 days per week Maximum Capacity = 50 employees Actual working = 40 employees Actual hour expected to be worked for four weeks = 6,400 hours Standard hours expected to be earned per four weeks = 8,000 hrs Actual hours worked in the four – week period = 6,000 hrs Standard hours earned in the four week period = 7,000 hrs

Problem – 13 (Quality Cost) ) To produce 1,000 units of product × the standard materials input is 1,200 units at a standard price of ` 6 per unit. The standard allows for rejects at the rate of 25% of input; it is estimated that one – third of total rejects can be reworked at an additional standard cost of ` 2 per unit. Strapped unit can be sold for 50p. each. During the period just ended, 19,500 units of × were produced 24,000 units of material were issued to production, at the standard cost of ` 6 per unit; 7,000 units were rejected on initial inspection and of these, 2,500 were reworked, at a cost of ` 5,100. The remainder were sold as scrap for 50p. unit. Required: Calculate the relevant variance.

Problem – 14 (Planning and Operational) ABC & Co. has set the standard price of material at ` 200 per kg. before the start of the period during the period. (i) Standard quantity of material specified for the output in the period: 20,000 kg. (ii) Actual material purchased and used: 21,000 kg. (iii) Actual purchase price paid: ` 2.80 due to an unforeseen occurrence which led to a material shortage.

Contd… At the end of the period, a price of ` 3.00 was agreed to have been an efficient buying price in the period. The standard costing system shows a direct material total variance of ` 8,800 made up of:- Material usage variance ` 2,000 (A) Material Price Variance ` 16,800 (A) Management wishes to distinguish between controllable and uncontrollable effects on performance.