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Management accounting Cost Accounting h

By Virginia Wood,2014-05-17 09:25
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Management accounting Cost Accounting h

     1

    STANDARD COSTING

Diagrammatic Representation: -

    Material Variance: -

    Material cost variance = SC AC = (SQ*AQ) (AQ*AP)

Labour Variances:-

    Labour Cost variance = SC AC = (SH*SR) (AH*AR)

Fixed Overhead Variance : -

    a) Standard OH = Standard hrs for actual output * Standard OH rate per hour

b) Absorbed OH = Actual hrs * Standard OH rate per hour

c) Budgeted OH = Budgeted hrs * Standard OH rate per hour

d) Actual OH = Actual hrs * Actual OH rate per hour

e) Revised Budgeted Hour = Actual Days * Budgeted Hours per day

     (Expected hours for actual days worked)

     2

     When Calendar variance is asked then for capacity variance Budgeted

    Overhead is (Budgeted days * Standard OH rate per day)

Revised Budgeted Hour (Budgeted hours for actual days) = Actual days * Budgeted

     hours per day

Variable Overhead Variance : -

     3

Sales Value Variances : -

    Sales value variance = Actual Sales Budgeted Sales

    Sales Margin Variances : -

Total sales margin variance = (Actual ProfitBudgeted price)

     = {Actual quantity * Actual profit per unit}-

     {Budgeted quantity * Standard profit per unit}

[Where :-

     SC = Standard Cost, AC = Actual Cost

     SP = Standard Price, SQ = Standard Quantity

     AP = Actual Price, AQ = Actual Quantity

     AY = Actual Yield, SY = Standard Yield

     RSQ = Revised Standard Quantity, SR = Standard Rate,

     ST = Standard Time AR = Actual Rate,

     AT = Actual Time RST = Revised Standard Time,

     BP = Budgeted Price, BQ = Budgeted Quantity

     RBT = Revised Budgeted Time

     BMPU = Budgeted Margin per Unit

     4

     AMPU = Actual Margin per Unit

Reconciliation:-

     Reconciliation statement is prepared to reconcile the actual profit with the

    budgeted profit

    Particulars Favorable Unfavorable (Rs) Budgeted Profit :

     Add Favorable variances

     Less Unfavorable variances

    Sales Variances :

     Sales price variance

     Sales mix variance

     Sales quantity variance

     Cost variance :-

    Material :

     Cost variance

     Usage variance

     Mix variance

    Labour :

     Rate variance

     Mix variance

     Efficiency variance

     Idle time variance

    Fixed overhead variance :

     Expenditure variance

     Efficiency variance

    Fixed overhead variance :

     Expenditure variance

     Efficiency variance

     Capacity variance

     Calendar variance

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