Scribd
Upload
104 views6 pages

Standard Costing Lecture and Problems

Standard costing is a method for determining planned costs for products or services. It sets predetermined costs that are scientifically calculated on a per unit basis to control costs, promote efficiency, and aid in pricing, cost control, performance evaluation, and management by objectives. Issues can arise from joint production processes where one product cannot be made without also making others, requiring allocation of joint costs incurred during that process among the resulting joint products.

Uploaded by

wdw shop
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
104 views6 pages

Standard Costing Lecture and Problems

Standard costing is a method for determining planned costs for products or services. It sets predetermined costs that are scientifically calculated on a per unit basis to control costs, promote efficiency, and aid in pricing, cost control, performance evaluation, and management by objectives. Issues can arise from joint production processes where one product cannot be made without also making others, requiring allocation of joint costs incurred during that process among the resulting joint products.

Uploaded by

wdw shop
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

STANDARD COSTING

 Scientifically predetermined
 Planned costs, scheduled costs
 Purpose
o To control costs and promote efficiency
 The standard cost of a product is usually computed on a per unit basis.

USE OF STANDARD COSTS

1. Cost control
○ refers to identifying a cost with its related benefits and making sure that the cost is
justified given the benefits derived.
○ Cost of Manufacturing = total units produce x standard unit
2. Pricing decisons
○ Prices covers the cost of a product and provides profit
○ accurate cost information is needed
○ SC provide a measure of consistency by eliminating fluctuations in actual costs, such as
seasonal cost for some raw materials
○ SC provides timely information
3. Performance appraisal
○ Performance standards are measures that allow fair and consistent evaluation of all
employees
○ Standards need to be clear so employees understand what is expected of them.
○ By setting clear, consistent standards that employees understand, performance
appraisals can be more objective and fair.
4. Cost Awareness
○ SC performance reports inform managers of the cost implications of these actions and
as a result make them take steps to effectively control costs.
5. Management by Objectives (MBO)
○ specific objectives are established for each business activity and the manager
responsible for that activity works to achieve the objectives.
○ SC provides a quick reference for identifying and reporting differences between
standard and actual performance.
P
PROBLEMS:
JOINT PROCESS

1. Joint process
○ One during which one product cannot be manufactured without producing others

2. Joint cost
○ Cost incurred for material, labor, and overhead during a joint process
○ Allocated only to the primary products of a joint process using either a physical or a
monetary measure

3. Separate costs
○ Assignable to specific products may be incurred in later production stages

4. Joint products
○ Output

5. Split-off-point
○ Identifiable na ung mga products

6. By products and scrap


○ not the main products
○ incidental outputs
○ still salable

7. Waste
○ final residual output; no sales value
CVP PROBLEMS

You might also like