Cost Accounting

15

Standard Costing and Variance Analysis

LEARNING OBJECTIVES

After studying this chapter you should be able to:

1. Understand the terms: standard, standard cost and standard costing.

2. Elucidate the salient features of a standard costing system.

3. Distinguish standard costing from budgetary control, historical costing and estimated costing.

4. Enumerate the advantages and limitations of standard costing.

5. Know the prerequisites for installation of a standard costing system.

6. Determine setting standards and analyse the problems in setting standards.

7. Understand the concept of standard hour and variance ratios.

8. Understand the terms: variance analysis and variance accounting.

9. Analyse all variances relating to material, labour, overhead and sales.

10. Prepare ...