Module 6 Standard Costing

1. Module 6 � Standard Costing June 4, 2001

2. Costing Systems Actual Full Absorption (job order & process) Normal Full Absorption (job order) Variable (job order & process) � (internal only) Activity- Based (job order & process) Standard Costing (process)

3. Standard Costing Mfg Standards are set for: Quantity of each input Price of each input Actual Costs are captured for period Variances are calculated Total Costs must be adjusted (for variances) for external reporting purposes

4. Standard Costing For Internal Purposes� Product is costed at standard Variance Analysis tells where problems might be�

5. Standards Stated in terms of input required� �FOR ONE UNIT OF OUTPUT Ideal Standard or Practical standard?

6. Example:

7. Product Cost at Standard

8. Example:

9. Example:

10. Example:

11. Closer Look�

12. Variance Analysis�

13. Variance Analysis�

14. Variance Analysis�

15. Closer Look�

16. Variance Analysis�

17. Variance Analysis�

18. Overheads?

19. Variance Analysis�

20. Variance Analysis�

21. Summary

22. Product Cost at Standard

23. Example:

24. Example:

25. Standard Costing Requires Variance Analysis Materials: Price and Usage Labor: Rate and Efficiency Overhead: Spending and Efficiency Gives Richer Information about Problem Areas External Reporting � (!)