Chapter 8 - Performance Evaluation Through Standard Costs - PowerPoint PPT Presentation

Loading...

PPT – Chapter 8 - Performance Evaluation Through Standard Costs PowerPoint presentation | free to download - id: 1f556f-ZDc1Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Chapter 8 - Performance Evaluation Through Standard Costs

Description:

Fair Labor Standards Act. Equal Employment Opportunity. May extend ... Labor ... Direct Labor Quantity Standard. The time that should be required to make one ... – PowerPoint PPT presentation

Number of Views:72
Avg rating:3.0/5.0
Slides: 34
Provided by: elle123
Learn more at: http://www.wiley.com
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Chapter 8 - Performance Evaluation Through Standard Costs


1
(No Transcript)
2
Performance Evaluation Through Standard Costs
3
Standards
  • Are common in business
  • Those imposed by government are regulations
  • Fair Labor Standards Act
  • Equal Employment Opportunity
  • May extend to personnel matters
  • Employee absenteeism
  • Ethical codes of conduct
  • Quality control standards
  • Standard costs for goods and services

4
Standard Costs vs Budgets
  • A standard is a unit amount.
  • A budget is a total amount.

5
Illustration 8-1
6
Setting Standard Costs Is Difficult
  • Requires input from all persons who have
    responsibility for costs and quantities.
  • Purchasing agents
  • Product managers
  • Quality control engineers
  • Production supervisors

7
Ideal Standards
  • Standards based on the optimum level of
    performance under perfect operating conditions.

8
Normal Standards
  • Standards based on an efficient level of
    performance that are attainable under expected
    operating conditions.

9
Normal Standards...
  • Should be rigorous but attainable.

10
Direct Materials Price Standard
Illustration 8-2
  • The cost per unit of direct materials that should
    be incurred, including amounts for related costs
    such as receiving, storing, handling.

11
Direct Materials Quantity Standard
Illustration 8-3
  • The quantity of direct material that should be
    used per unit of finished goods.

12
Direct Materials Standard
Illustration 8-3
  • Is the standard direct materials price times the
    standard direct materials quantity.
  • For Xonic the standard direct materials cost per
    gallon is
    12.00 (3.00 x 4.0 pounds).

13
Direct Labor Price Standard
Illustration 8-4
  • The rate per hour that should be incurred for
    direct labor, including allowances for
    unavoidable wastes and normal spoilage.

Item
Price Hourly wage
rate 7.50COLA .25 Payroll taxes .75Fringe
benefits 1.50Standard direct labor rate per
pound 10.00
14
Direct Labor Quantity Standard
Illustration 8-5
  • The time that should be required to make one unit
    of a product.

15
Direct Labor Standard
Illustration 8-3
  • Is the standard direct labor rate times the
    standard direct labor hours.
  • For Xonic the standard direct labor cost per
    gallon is
    20.00 (10.00 x 2.0 hours).

16
Standard Hours Allowed
  • The hours that should have been worked for the
    units produced.
  • With standard costs, manufacturing overhead costs
    are applied to work in process on the basis of
    standard hours allowed.

17
Standard Predetermined Overhead Rate
  • An overhead rate determined by dividing budgeted
    overhead costs by an expected standard activity
    index.

18
Manufacturing Overhead
Illustration 8-6
Budgeted Standard Overhead
RateOverhead Direct per Direct
Costs Amount ? Labor Hours Labor Hour
Variable 79,200 26,400 3.00
Fixed 52,800 26,400 2.00
Total 132,000 26,400 5.00

19
Standard Cost per Gallon
Illustration 8-7
A standard cost card is prepared for each
product.
20
Variances
  • The difference between total actual costs and
    total standard costs.

21
Various Relationships
Illustration 8-10
Total Materials Variance
Materials Price Variance
Materials Quantity Variance
Total Variance
Total Labor Variance
Labor Price Variance
Labor Quantity Variance
Total Overhead Variance
Overhead Controllable Variance
Overhead Volume Variance

22
Total Materials Variance
  • The difference between the actual quantity times
    the actual price and the standard quantity times
    the standard price of materials.

23
Materials Price Variance
  • The difference between the actual quantity times
    the actual price and the
    actual quantity times the
    standard price for
    material.

24
Materials Quantity Variance
  • The difference between the actual quantity times
    the standard price and the standard quantity
    times the standard price for materials.

25
Total Labor Variance
  • The difference between actual hours times the
    actual rate and standard hours times the
    standard rate for labor.

26
Labor Price Variance
  • The difference between the actual hours times the
    actual rate and the actual hours times the
    standard rate for labor.

27
Labor Quantity Variance
  • The difference between the actual hours times the
    standard rate and the standard hours times
    the standard rate for
    labor.

28
Overhead Controllable Variance
  • The difference between actual overhead incurred
    and overhead budgeted for the standard hours
    allowed.

29
Overhead Volume Variance
  • The difference between overhead budgeted for the
    standard hours allowed and the overhead applied.

30
Total Overhead Variance
  • The difference between actual overhead costs and
    overhead costs applied to work done.

31
Reporting Variances
32
Statement Presentation of Variances
Illustration 8-31
33
(No Transcript)
About PowerShow.com