tailieunhanh - Lecture Principles of accounting (2005): Chapter 25 - Needles, Powers, Crosson

Chapter 25 - Standard costing and variance analysis. Chapter 25 covers standard costing from the standardized of performance measurement. It introduces and calculates variances. It demonstrates how variance analysis can be used as a means of establishing and maintaining cost control. | Standard Costing and Variance Analysis Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 25 Learning Objectives Define standard costs and describe how managers use standard costs in the management cycle. Explain how standard costs are developed and compute a standard unit cost. Prepare a flexible budget and describe how variance analysis is used to control costs. Learning Objectives (cont’d) Compute and analyze direct materials variances. Compute and analyze direct labor variances. Compute and analyze manufacturing overhead variances. Explain how variances are used to evaluate managers’ performance. Standard Costing Objective 1 Define standard costs and describe how managers use standard costs in the management cycle Standard Costing is a method of cost control that includes a measure of actual performance and a measure of the difference, or variance, between standard and actual performance Standard Costs Realistic estimates of costs Based on analysis . | Standard Costing and Variance Analysis Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 25 Learning Objectives Define standard costs and describe how managers use standard costs in the management cycle. Explain how standard costs are developed and compute a standard unit cost. Prepare a flexible budget and describe how variance analysis is used to control costs. Learning Objectives (cont’d) Compute and analyze direct materials variances. Compute and analyze direct labor variances. Compute and analyze manufacturing overhead variances. Explain how variances are used to evaluate managers’ performance. Standard Costing Objective 1 Define standard costs and describe how managers use standard costs in the management cycle Standard Costing is a method of cost control that includes a measure of actual performance and a measure of the difference, or variance, between standard and actual performance Standard Costs Realistic estimates of costs Based on analysis of both past and projected operating costs and conditions Provide a predetermined performance level for the standard costing method Usually stated in terms of cost per unit Standard Costs (cont’d) Based on Past costs Engineering estimates Forecasted demand Worker input Time and motion studies Type and quality of direct materials Standard Costing How the standard costing method differs from the normal and actual costing methods Standard Costs and the Management Cycle Planning Managers use standard costs to Develop budgets Direct materials Direct labor Variable manufacturing overhead Establish goals for product costing Standard Costs and the Management Cycle (cont’d) Executing Managers use standard costs to Apply dollar, time, and quality standards to work Collect actual cost data Standard Costs and the Management Cycle (cont’d) Reviewing Managers compare standard and actual costs Compute variances Provide measures of performance that can be used to control costs and evaluate managers .