ch09tc - COST MANAGEMENT 1 Accounting & Control...

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Unformatted text preview: COST MANAGEMENT 1 Accounting & Control HansenMowenGuan Chapter 9 Standard Costing: A Functional- Based Control Approach 2 Study Objectives 1. Describe how unit input standards are developed, and explain why standard costing systems are adopted. 2. Explain the purpose of a standard cost sheet. 3. Compute and journalize the direct materials and direct labor variances, and explain how they are used for control. 4. Compute overhead variances three different ways, and explain overhead accounting. 5. Calculate mix and yield variances for direct materials and direct labor. 3 Developing Unit Input Standards Unit standard cost is the product of standard price and standard quantity ( 29 Standard Standard Price Quantity SP SQ Quantity standards specify how much of the input should be used per unit of output Price standards specify how much should be paid for the quantity of the input to be used 4 Developing Unit Input Standards Ideal standards demand maximum efficiency and can be achieved only if everything operates perfectly. Currently attainable standards can be achieved under efficient operating conditions. Kaizen standards reflect a planned improvement and are a type of currently attainable standard. 5 Developing Unit Input Standards Usage of standard costing systems Cost management Planning and control Decision making and product costing 6 Developing Unit Input Standards 7 Standard Cost Sheets 8 Actual Production = 30,000 quarts Actual Yogurt used = 780,000 ounces (no Beg. or End. Inventory Actual price paid per ounce of yogurt = $0.025 Actual Direct Labor Hours: 325 hours Actual Wage Rate: $8.20 per hour Total budget variance = (AP AQ) (SP SQ) Variance Analysis and Accounting: Direct Materials and Direct Labor 9 Variance Analysis and Accounting: Direct Materials and Direct Labor 10...
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This note was uploaded on 11/14/2009 for the course ACC 2338 taught by Professor Tba during the Fall '09 term at Randolph College.

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ch09tc - COST MANAGEMENT 1 Accounting & Control...

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