《2.management 企业管理类英文版PPT课件 .28..pptVIP

Performance Evaluation Through Standard CostsAdapted forAccounting 212 Chapter 26 1 Distinguish between a standard and a budget. 2 Identify the advantages of standard costs. 3 Describe how standards are set. 4 State the formulas for determining direct materials and direct labor variances. 5 State the formulas for determining manufacturing overhead variances. 6 Discuss the reporting of variances. 7 Enumerate the features of a standard cost accounting system. The Need for Standards Standards common in business those imposed by government agencies are often called regulations (such as Fair Labor Standards Act) Standard costs predetermined unit costs used as measures of performance Standards and Budgets STUDY OBJECTIVE 1 Both are pre-determined costs and both contribute to management planning and control. Standard unit amount Budget total amount Standard costs may be incorporated into a cost accounting system. Why Standard Costs?STUDY OBJECTIVE 2 Setting Standard CostsSTUDY OBJECTIVE 3 Input from all persons who have responsibility for costs and quantities. Two levels Ideal standards optimum levels of performance under perfect operating conditions Normal standards efficient levels of performance attainable under expected operating conditions A Case Study To establish the standard cost of producing a product, it is necessary to establish standards for each manufacturing cost element - direct materials, direct labor, and manufacturing overhead. The standard for each element is derived from the standard price to be paid and the standard quantity to be used. To illustrate, assume that Xonic, Inc., wishes to use standard costs to measure performance in filling an order for 1,000 gallons of Weed-O, a liquid weed killer. Direct Materials Standard Cost per unit which should be incurred purchasing department’s best estimate of the cost of raw materials include amount for related costs receiving, storing, and handling Setting Dire