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Costing pp 375-425 | Cite as

Standard costing and variance analyses

  • Colin Drury

Abstract

After studying this chapter, you should be able to:
  • explain how standard costs are set;

  • define basic, ideal and currently attainable standards;

  • explain how a standard costing system operates;

  • calculate labour, material, overhead and sales margin variances and reconcile actual profit with budgeted profit;

  • identify the causes of labour, material, overhead and sales margin variances;

  • construct a departmental performance report;

  • distinguish between standard variable costing and standard absorption costing.

Keywords

Wage Rate Price Variance Direct Material Actual Price Efficiency Variance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References and Further Reading

  1. Accounting Standards Committee (1977) Accounting for Stocks and Work in Progress (SSAP 9).Google Scholar
  2. Barnes, K. and Targett, P. (1984) Standard costing in distribution, Management Accounting, May, 26–7.Google Scholar
  3. Drury, C., Braund, S., Osborne, P. and Tayles, M. (1993) A Survey of Management Accounting Practices in UK Manufacturing Companies, ACCA Research Occasional Paper, Chartered Association of Certified Accountants.Google Scholar
  4. Greer, W.R. (1975) Standard costing in non-manufacturing activities, Cost and Management (Canada), November/December, 12–16.Google Scholar
  5. Horngren, C:T. (1978) A contribution margin approach to the analysis of capacity utilization, in Contemporary Issues in Cost and Managerial Accounting, (eds H.R. Anton, P.A. Firmin and H.D. Grove), Houghton Mifflin.Google Scholar
  6. Lauderman, M. and Schaeberle, F.W. (1983) The cost accounting practices of firms using standard costs, Cost and Management (Canada), July/August, 21–5.Google Scholar
  7. Puxty, A.G. and Lyall, D. (1989) Cost Control into the 1990s: A Survey of Standard Costing and Budgeting Practices in the UK, Chartered Institute of Management Accountants; see alQrManagement Accounting, February 1990, 44–5.Google Scholar

Copyright information

© Colin Drury 1994

Authors and Affiliations

  • Colin Drury

There are no affiliations available

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