TAILIEUCHUNG - Lecture Financial and managerial accounting (4/e): Chapter 21 - Wild, Shaw, Chiappetta

Chapter 21 - Flexible budgets and standard costing. The goals of this chapter are: Define standard costs and explain how standard cost information is useful for management by exception, describe variances and what they reveal about performance, analyze changes in sales from expected amounts,. | Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 21 Flexible Budgets and Standard Costing Conceptual Learning Objectives C1: Define standard costs and explain how standard cost information is useful for management by exception . 21- A1: Analyze changes in sales from expected amounts. Analytical Learning Objectives 21- P1: Prepare a flexible budget and interpret a flexible budget performance report. P2: Compute materials and labor variances. P3: Compute overhead variances. P4A: Prepare journal entries for standard costs and account for price and quantity variances. Procedural Learning Objectives 21- Management uses budgets to monitor and control operations. Develop the budget from planned objectives. Compare actual with budget and analyze any differences. Take corrective and strategic actions. Revise objectives and prepare a new budget. Budgetary Control and Reporting P1 21- Improve performance evaluation. May be prepared for any activity level in the relevant range. Show revenues and expenses that should have occurred at the actual level of activity. Reveal variances due to good cost control or lack of cost control. Purpose of Flexible Budgets P1 21- To a budget for different activity levels, we must know how costs behave with changes in activity levels. Total variable costs change in direct proportion to changes in activity. Total fixed costs remain unchanged within the relevant range. Fixed Variable Preparing Flexible Budgets P1 21- Benchmarks for measuring performance. The expected level of performance. Based on carefully predetermined amounts. Used for planning labor, material and overhead requirements. Standard Costs are Standard Costs C 1 21- Use product design specifications. Use competitive bids for the quality and quantity desired. Quantity Standards Setting Direct Material Standards Price Standards C 1 21- Setting Direct Labor Standards Use time and motion studies for each labor operation. Use wage surveys and labor contracts. Time Standards Rate Standards C 1 21- The activity is the cost driver used to calculate the predetermined overhead. The rate is the variable portion of the predetermined overhead rate. Setting Variable Overhead Standards Activity Standards Rate Standards C 1 21- Type of Product Cost Amount Manufacturing Overhead Direct Material Direct Labor Standard cost A standard cost variance is the amount by which an actual cost differs from the standard cost. Variances P2 21- Prepare standard cost performance report Conduct next period’s operations Analyze variances Identify questions Receive explanations Take corrective actions Begin Variance Analysis P2 21- Standard Cost Variances Computing Variances Quantity Variance Price Variance The difference between the actual price and the standard price The difference between the actual quantity and the standard quantity P2 21- Unfavorable Efficiency Variance Poorly trained workers Poor supervision of workers Poor quality materials Poorly maintained equipment P2 Labor Variances 21- Overhead Rate Contains a variable unit rate which stays constant at all levels of activity. Contains a fixed overhead rate which declines as activity level increases. Function of activity level chosen to determine rate. Setting Overhead Standards P3 21- Total Overhead Variance Variable Overhead Fixed Overhead Efficiency Variance Spending Variance Volume Variance Spending Variance Controllable Variance Overhead Variance Analysis P3 21- End of Chapter 21 21-

• Tài chính doanh nghiệp
• Managerial accounting
• Lecture Financial and managerial accounting
• Financial statements
• Managerial decisions
• Flexible budgets
• Standard costing
• Managerial accounting for managers
• Lecture Managerial accounting
• Profitability analysis
• Decision making
• Operations management majors
• Nonmanufacturing costs
• Classifications of costs
• Kế toán quản trị
• Managerial accounting information
• General cost classifi cations
• Product costs
• Process costing
• Standard costing systems
• Accounting information
• Managerial decision
• Process management
• Financial statement
• Cost concepts
• Managerial accounting basics
• Managerial cost
• Period costs
• Financial accounting
• Dynamic business environment
• Reporting manufacturing activities
• Accounting principles
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Relevant costing
• Accounting activities
• Business activities
• Income statement
• Accounting cycle
• Accounting for merchandising operations
• Merchandising operations
• Capital budgeting decisions
• Time value of money
• Income taxes
• After tax cost