Standard Costing
Content
Sr no : Name 1. : Meaning and Introduction of Standard costing 2. : CIMA { } 3. : Advantages of Standard costing 4. : Limitation of standard costing 5. : Types of standard costing 6. : Examples of standard costing 7. : Variance analysis 8. : Types of analysis 9. : Refferences 10. : Conclusion
Standard Costing and Variance Analysis
Introduction
MEANING OF STANDARD COST AND STANDARD COSTING
Standard Cost
The word "Standard" means a "Yardstick" or "Bench Mark." The term "Standard Costs" refers to Pre-determined costs. Brown and Howard define Standard Cost as a Pre-determined Cost which determines what each product or service should cost under given circumstances. This definition states that standard costs represent planned cost of a product.
Standard Cost as defined by the Institute of Cost and Management Accountant, London "is the Predetermined Cost based on technical estimate for materials, labour and overhead for a selected period of time and for a prescribed set of working conditions."
,Standard Costing
Standard Costing is a concept of accounting for determination of standard for each element of costs.
These predetermined costs are compared with actual costs to find out the deviations known as "Variances." Identification and analysis of causes for such variances and remedial measures should be taken in order to overcome the reasons for Variances.
Chartered Institute of Management Accountants England defines Standard Costing as "the Preparation and use of standard costs, their comparison with actual costs and the analysis of variances to their causes and points of incidence."
From the above definition, the technique of Standard Costing may be summarized as follows :
(1) Determination of appropriate standards for each element of cost.
(2)'Ascertainment of information about actuals and use
Sr no : Name 1. : Meaning and Introduction of Standard costing 2. : CIMA { } 3. : Advantages of Standard costing 4. : Limitation of standard costing 5. : Types of standard costing 6. : Examples of standard costing 7. : Variance analysis 8. : Types of analysis 9. : Refferences 10. : Conclusion
Standard Costing and Variance Analysis
Introduction
MEANING OF STANDARD COST AND STANDARD COSTING
Standard Cost
The word "Standard" means a "Yardstick" or "Bench Mark." The term "Standard Costs" refers to Pre-determined costs. Brown and Howard define Standard Cost as a Pre-determined Cost which determines what each product or service should cost under given circumstances. This definition states that standard costs represent planned cost of a product.
Standard Cost as defined by the Institute of Cost and Management Accountant, London "is the Predetermined Cost based on technical estimate for materials, labour and overhead for a selected period of time and for a prescribed set of working conditions."
,Standard Costing
Standard Costing is a concept of accounting for determination of standard for each element of costs.
These predetermined costs are compared with actual costs to find out the deviations known as "Variances." Identification and analysis of causes for such variances and remedial measures should be taken in order to overcome the reasons for Variances.
Chartered Institute of Management Accountants England defines Standard Costing as "the Preparation and use of standard costs, their comparison with actual costs and the analysis of variances to their causes and points of incidence."
From the above definition, the technique of Standard Costing may be summarized as follows :
(1) Determination of appropriate standards for each element of cost.
(2)'Ascertainment of information about actuals and use