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  • Standard Costing: SISMIRA (1910531029) Rahimah Ramadhani P (1910536050)

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    Rahimah Im
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    Standard costing provides facilities for product costing and improves planning and control to enhance performance measurement. It makes it easier to calculate finished good costs, prepare budgets, and control costs. Standard costs are set by determining standard quantities and prices for raw materials, direct labor hours and rates, and factory overhead rates. Variances occur when actual costs differ from standards, such as the raw material cost, price, and quantity variances. These variances are analyzed and recorded in journal entries to track favorable and unfavorable differences from standards. Standard costing requires accurate standards and high costs to implement but can improve cost management.

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    Standard Costing

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    Standard costing provides facilities for product costing and improves planning and control to enhance performance measurement. It makes it easier to calculate finished good costs, prepare budgets, and control costs. Standard costs are set by determining standard quantities and prices for raw materials, direct labor hours and rates, and factory overhead rates. Variances occur when actual costs differ from standards, such as the raw material cost, price, and quantity variances. These variances are analyzed and recorded in journal entries to track favorable and unfavorable differences from standards. Standard costing requires accurate standards and high costs to implement but can improve cost management.

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    10 views13 pages

    Standard Costing: SISMIRA (1910531029) Rahimah Ramadhani P (1910536050)

    Uploaded by

    Rahimah Im
    Standard costing provides facilities for product costing and improves planning and control to enhance performance measurement. It makes it easier to calculate finished good costs, prepare budgets, and control costs. Standard costs are set by determining standard quantities and prices for raw materials, direct labor hours and rates, and factory overhead rates. Variances occur when actual costs differ from standards, such as the raw material cost, price, and quantity variances. These variances are analyzed and recorded in journal entries to track favorable and unfavorable differences from standards. Standard costing requires accurate standards and high costs to implement but can improve cost management.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 13

    STANDARD

    COSTING
    SISMIRA (1910531029)
    Rahimah Ramadhani P (1910536050)
    COST MEASUREMENT SYSTEM

    Actual Costing

    Normal Costing

    Standard Costing

    Estimated Costing
    Reason for The Standard Cost System
    being Adopted

    2. Standard costing
    1. Standart costing can improve planning
    provides facilities in and control and
    product costing. improve performance
    measurement.
    STANDARD COSTING ADVANTAGES

    Make it easier to
    Make it easier to Make it easier to
    calculate the cost of
    prepare a budget control
    finished good

    Used for Subsidiary ledger for


    performance direct raw materials
    appraisal of unit and finished good is
    managers not needed
    STANDARD COSTING WEAKNESS

    The manager
    Requires a high attaches importance
    cost his own
    performance
    Standard Cost

    Definition : cost to
    be achieve to
    produce one unit Formula :
    of product. Standard Quantity x
    Standard Price
    SETTING THE STANDARD
    SETTING THE STANDARD

    Setting row material 1. Setting raw material quantity standard


    cost standard 2. Setting raw material price standard

    Setting labor cost 1. Setting direct labor hour (DLH) standard


    standard 2. Setting labor rate standard

    Setting factory 1. Setting direct labor hour standard


    overhead standard 2. Setting factory overhead rate standard
    Variance happen
    actual cost differs
    from standard cost
    Raw Material Cost (RMC)
    Variance
    = Actual RMC – Standard
    RMC
    = (AQ x AP) – (SQ x SP)

    Variances Analysis Note


    Favorable Variance
    = Actual RMC < Standard RMC

    Unfavorable Variance
    = Actual RMC > Standard RMC
    Material Price Variance

    Material Price Variance= (AP-SP) x AQ Purchase or used

    Favorable Variance = AP < SP


    Unfavorable Variance = AP > SP

    Material Quantity Or Usage Variance= (AQ – SQ ) x SP

    Favorable Variance = AQ < SQ


    Unfavorable Variance = AQ > SQ
    Journal Direct Raw Material Variance
    Journal direct raw material when Purchased:
    a. Purchase Journal
    Direct Supply of raw material xxx
    Unfavorable Price xxx
    Cash xxx
    b. Direct raw material usage
    Supply good in process xxx
    favorable quantity xxx
    direct supply of raw material xxx
    Journal Direct Raw Material Variance
    Journal direct raw material when used
    a. Purchase Journal
    Direct Supply of raw material xxx
    Cash xxx
    b. Direct raw material used
    Supply good in process xxx
    Unfavorable Price
    favorable quantity xxx
    direct supply of raw material xxx
    Journal Direct Raw Material Variance
    Journal direct raw material when purchased and used
    a. Purchase Journal > standard
    Direct Supply of raw material xxx
    Unfavorable price purchase xxx
    Cash xxx
    b. Reverse variance purchase to variance purchase
    Unfavorable price used xxx
    unfavorable price purchase xxx
    c. Direct raw material used
    Supply good in process xxx
    favorable quantity xxx
    direct suplly raw material
    THANK YOU

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