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Standard Costing and Variance Analysis

The document covers Standard Costing, which involves comparing predetermined costs to actual costs to identify variances, and discusses various types of standards such as Material, Labour, and Overhead Standards. It also contrasts Standard Costing with Budgetary Control, highlighting advantages like improved cost control and limitations such as the challenge of setting accurate standards. Additionally, the document outlines principles of product pricing, including demand analysis, pricing policies, and methods like target costing and competition-based pricing.

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5 views2 pages

Standard Costing and Variance Analysis

The document covers Standard Costing, which involves comparing predetermined costs to actual costs to identify variances, and discusses various types of standards such as Material, Labour, and Overhead Standards. It also contrasts Standard Costing with Budgetary Control, highlighting advantages like improved cost control and limitations such as the challenge of setting accurate standards. Additionally, the document outlines principles of product pricing, including demand analysis, pricing policies, and methods like target costing and competition-based pricing.

Uploaded by

utkarshamore2901
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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(16 Lectures) Standard Costing (16 Lectures

1. Definition and Meaning:


o Standard costing is a method where predetermined costs are compared with actual
costs to calculate variances.

2. Types of Standards:
o Material, Labour, and Overhead Standards are set based on expected efficiency.
o Different types include Ideal Standards, Basic Standards, and Attainable
Standards.

3. Difference between Standard Costing and Budgetary Control:


o Standard Costing focuses on cost control by comparing actual and standard costs.
o Budgetary Control is about setting budgets for future periods and comparing
actual performance with budgeted figures.

4. Advantages and Limitations of Standard Costing:


o Advantages: Better cost control, performance evaluation, and decision-making.
o Limitations: Difficulty in setting accurate standards and unsuitability in dynamic
environments.

✅ Pricing Decision (14 Lectures)

1. Principles of Product Pricing:


o Analyzing demand, cost, competition, and market conditions to determine the
right price.
2. Pricing Policy:
o Formulating policies regarding discounts, credit terms, and price adjustments.
3. Pricing of New and Finished Products:
o Strategies for pricing new products and adjusting prices of existing products
based on market response.
4. Target Costing:
o A pricing strategy that involves determining the target cost by subtracting desired
profit from the market price.
5. Pricing Methods:
o Competition-based: Pricing influenced by competitors’ pricing.
o Cost-based: Adding a markup to the cost of production.

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