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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)

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

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 :

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

Expenditure variance

Efficiency variance