TARUN JHALANI STANDARD COSTING Find the Actual Set up the Estimates STANDARD COSTING Feed back &

control the variances Analysis Of Variances COST VARIANCES If Actual > Budgeted If Actual < Budgeted Resultant figure is Resultant Figure is ve , +ve,(Adverse variance) (Favorable variance) VARIANCES COST VARIANCES

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Comparison of estimates with actual

Calculate the Variances

SALES VARIANCES If Actual > Budgeted If Actual < Budgeted Resultant figure is +ve Resultant Figure is ve , (Favorable variance) , (Adverse variance)

SALES VARIANCES Sales Value Variance

Material Variance

Labor Variance

Overhead Variance

Sales Margin Variance

Fixed Overhead Variance

Variable Overhead Variance

Direct Material Cost Variance [M1-M4]

Direct Material Price Variance [M1-M2]

Direct Material Usage Variance [M2-M4]

Direct Material Mix Variance [M2-M3]

Direct Material Yield Variance [M3-M4]

Standard Costing unique approach_____________________________________1

TARUN JHALANI M1 M2 M3

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Actual cost for Actual Material Used AP x AQused) Budgeted Cost for Actual Mat. Used (SP x AQ used) Budgeted Cost for actual Mat. Used , but if it is used in (SP x RSQ Standard Ratio. M4 Standard Cost for actual Production (SP x SQ produced) RSQ=BQ of x or y x Total AQ SQ=BQ of x or y x Actual output Total BQ Budgeted output X or y is the raw mat. To be used in processing the finished units AP=Actual Price SP=Standard Price AQ=Actual Quantity BQ= Budgeted Quantity RSQ=Revised Standard Quantity Direct Labour Cost Variances[L1-L5]

Direct Labor Rate Variance [L1-L2] Total Variable Overhead Variance[VO1-Vo3] Direct Labor Idle Time Var. [L2-L3]

Direct Labor Total Efficiency Var. [M2-M5]

Variable Overhead Exp Var.[Vo1-Vo2]

Variable Ovh. Efficiency Var. [Vo2-Vo3]

Direct Labor Net Efficiency Var.[L3-L5]

Vo1=AR x AH =Actual Ovh Incurred Direct Labor Direct Labor Vo2=SR x AH=Actual Hour Work at Std. rate Mix (Gang)Var. Yield Variance Vo3=SR x SH produced [L3-L4] [L4-L5] SR=Std Rate & AR=Actual Rate SH produced= BH of x or y x Actual output Budgeted output L1=AR x TAH TAH=Total Actual Hours for which payment is made. (NAH+IH) NAH=Net Actual Hours , Hours actually worked (TAH-IH) L2=SR x TAH IH=Idle Hours BH=Budgeted Hours RSH=Revised Std Hours L3=SR x NAH SR=Standard Rate AR=Actual Rate AH=Actual Hours L4=SR x RSH L5=SR p.u. x RSH= BH of x or y x Total NAH SH produced=BH of x or y x Actual output SH produced Total BH Budgeted output Total Fixed Overhead Variance[Fo1-Fo5]

Fixed Ovh. Expenditure. Var. [Fo1-Fo2]

Fixed Ovh. Volume Var. [Fo2-Fo5]

Fixed Ovh. Fixed Ovh. Calander Fixed Ovh. Capacity Var. (Idle Time) Efficiency. Var. [Fo3-Fo4] Standard Costing unique approach_____________________________________ 2 Var. [Fo2-Fo3] [Fo4-Fo5]

TARUN JHALANI Fo1 Fo2 Fo3 Fo4 Fo5 Actual Fixed Ovh.(AFO) Budgeted Fixed Ovh.(BFO) Total Fixed Ovh(TFO) Net Fixed Ovh,(NFO) Std. fixed Ovh.(SFO) AFO per hour x AH BFO per Hour x BH BFO per Day x Actual Days BFO Per Hour x AH worked BFO Per hour x SH Produced BFO per Unit x Actual Output

9887595895 AH= Actual Hours

Sales Margin Variance[SM1-SM4]

Sales Margin Price Variance [SM1-SM2]

Sales Margin Volume Var. [SM2-SM4]

Sales Margin Mix Variance [SM2-SM3] Total sales Value Variance[SV1-SV4]

Sales Margin Quantity Var. [SM3-SM4]

Sales Value Price Variance [SV1-SV2]

Sales Value Volume Var. [SV2-SV4]

Sales Value Mix Variance [SV2-SV3] SM1 SM2 SM3 SM4 Actual sales x Actual Sales Margin Actual sales x Standard Sales Margin RSQ of sales x Standard Sales Margin SQ x standard sales margin SV1 SV2 SV3 SV4 AQ x ASP AQ x SSP RSQ x SSP SQ x SSP

Sales Value Quantity Var. [SV3-SV4] ASP=Actual Sales Price SSP=Std. sales price RSQ=Revised Sales qty. BQ of x or y x AQ of x y Total Budgeted sales AQ=Actual Quantity SQ=Standard Quantity

Brief M1 M2 M3 M4

Anlaysis L1 Vo1 L2 Vo2 L3 L4 L5 Vo5

Fo1 Fo2 Fo3 Fo4 Fo5

SM1 SM2 SM3 SM4

SV1 SV2 SV3 SV4

First step is relating to actual everywhere 2ndStep is relating to actual at standard except Fo2 3rdstep everywhere is relating to Mix except Fo3 4thStep is relating to output, everywhere

Standard Costing unique approach_____________________________________3