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  • Variances

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    Rosemarie Cruz
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    Variances indicate differences between actual and planned performance. Standard costs establish price and quantity amounts for inputs and are used to calculate variances. Standard cost sheets include the standard cost per unit, standard price, and standard quantity for inputs.

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    Variances indicate differences between actual and planned performance. Standard costs establish price and quantity amounts for inputs and are used to calculate variances. Standard cost sheets include the standard cost per unit, standard price, and standard quantity for inputs.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    27 views2 pages

    Variances

    Uploaded by

    Rosemarie Cruz
    Variances indicate differences between actual and planned performance. Standard costs establish price and quantity amounts for inputs and are used to calculate variances. Standard cost sheets include the standard cost per unit, standard price, and standard quantity for inputs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    Variances indicate

    that actual performance is not going according to plan.

    The unit standard cost is

    .The product of the standard price times the standard quantity for each unit.

    Price standards are the responsibility

    accounting, purchasing, personnel

    Quantity price standards a. are standard price multiplied by standard quantity

    specify how much should be paid for the quantity of input to be used.

    The standard cost sheet includes all of the following

    the standard cost per unit, the standard price, the standard quantity per unit.

    Standard costing

    establishes price and quantity standards for inputs

    Diaz Company has developed the following standards for one of its products: Direct materials 3.50
    pounds × $4 per pound Direct labor 1 hour × $12 per hour Variable manufacturing overhead 1 hour × $6
    per hour The following activity occurred during the month of April: Materials purchased 2,000 pounds
    costing $22,500 Materials used 1,600 pounds Units produced 250 units Direct labor 550 hours at $12.50
    per hour Actual variable manufacturing overhead: $2,500 The company records materials price
    variances at the time of purchase. The total variable standard cost is
    $8,000

    SUPPORTING CALCULATIONS: Direct materials (3.50 pounds × $4) $14.00 Direct labor (1 hour × $12)
    12.00 Variable overhead (1 hour × $6) 6.00 Variable standard cost per unit $32.00 Total variable
    standard cost (250 units × $32) $8,000

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