AccountingCode 9706
Standard costing
What this topic asks you to be able to do
- what is meant by a standard costing system used within an organisation
- what a standard costing system offers and where it falls short
- the ways in which standard costing may serve as a tool for raising a firm's performance
- how to work out, for each item below, its variance figures: price and usage for direct material; rate and efficiency for direct labour; expenditure and volume for fixed overheads; capacity and efficiency sub-variances for fixed overheads; price and volume for sales
- the likely reasons behind favourable or adverse variances, and how these variances connect to one another
- how to use supporting data to reach business decisions and make recommendations
- why non-financial factors matter