GNB_10_12e - Chapter 10 Standard Costs Standard Costs...

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Chapter 10 Standard Costs Standard Costs Variance Analysis Cycle Setting Standard Costs Accountants, engineers, purchasing agents, and production managers combine efforts to set standards that encourage efficient future production. Setting Standard Costs Learning Objective 1 Setting Direct Material Standards Setting Standards Setting Direct Labor Standards Setting Variable Overhead Standards Standard Cost Card – Variable Production Cost Standards vs. Budgets Price and Quantity Standards A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis A General Model for Variance Analysis Learning Objective 2 Material Variances Example Glacier Peak Outfitters has the following direct material standard for the fiberfill in its mountain parka. 0.1 kg. of fiberfill per parka at $5.00 per kg. Last month 210 kgs of fiberfill were purchased and used to make 2,000 parkas. The material cost a total of $1,029. Material Variances Summary Material Variances Summary
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Material Variances Summary Material Variances: Using the Factored Equations Materials price variance MPV = AQ (AP - SP) = 210 kgs ($4.90/kg - $5.00/kg) = 210 kgs (-$0.10/kg) = $21 F Materials quantity variance MQV = SP (AQ - SQ) = $5.00/kg (210 kgs-(0.1 kg/parka × 2,000 parkas)) = $5.00/kg (210 kgs - 200 kgs) = $5.00/kg (10 kgs) = $50 U Isolation of Material Variances Material Variances Quick Check ü Quick Check
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GNB_10_12e - Chapter 10 Standard Costs Standard Costs...

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