管理会计学英文版课件：Chap12 Standard Costs and Variances

1、Standard Costs and VariancesChapter 12Standard CostsStandards are benchmarks or “norms” formeasuring performance. In managerial accounting,two types of standards are commonly used.Quantity standardsspecify how much of aninput should be used tomake a product orprovide a service.Price standardsspecify

2、 how muchshould be paid foreach unit of theinput.Examples: Firestone, Sears, McDonalds, hospitals, construction and manufacturing companies.2Setting Direct Material Standards PriceStandardsFinal, deliveredcost of materials,net of discounts.Summarized in a Bill of Materials.QuantityStandards3Setting

3、Direct Labor Standards RateStandardsOften a singlerate is used that reflectsthe mix of wages earned.TimeStandardsUse time and motion studies foreach labor operation.4Setting Variable Manufacturing Overhead Standards RateStandardsThe rate is the variable portion of the predetermined overhead rate.Qua

4、ntityStandardsThe quantity is the activity in the allocation base for predetermined overhead.5Standard Cost Card Variable Production Cost A standard cost card for one unit of product might look like this:6Using Standards in Flexible BudgetsStandard costs per unit for direct materials, direct labor,

5、and variable manufacturing overhead can be used to compute activity and spending variances.Spending variances become more useful by breaking them down into price and quantity variances.7A General Model for Variance AnalysisVariance AnalysisPrice VarianceDifference betweenactual price and standard pr

6、iceQuantity VarianceDifference betweenactual quantity andstandard quantity8Price and Quantity StandardsPrice and quantity standards are determined separately for two reasons: The purchasing manager is responsible for raw material purchase prices and the production manager is responsible for the quan

7、tity of raw material used. The buying and using activities occur at different times. Raw material purchases may be held in inventory for a period of time before being used in production. 9Variance AnalysisMaterials price varianceLabor rate varianceVOH rate varianceMaterials quantity varianceLabor ef

8、ficiency varianceVOH efficiency varianceA General Model for Variance AnalysisPrice VarianceQuantity Variance10Price VarianceQuantity Variance Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard PriceA General Model for Variance Analysis11Price VarianceQuantity Vari

9、ance Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard PriceA General Model for Variance AnalysisActual quantity is the amount of direct materials, direct labor, and variable manufacturing overhead actually used.12Price VarianceQuantity Variance Actual Quantity A

10、ctual Quantity Standard Quantity Actual Price Standard Price Standard PriceA General Model for Variance Analysis Standard quantity is the standard quantity allowed for the actual output of the period.13Price VarianceQuantity Variance Actual Quantity Actual Quantity Standard Quantity Actual Price Sta

11、ndard Price Standard PriceA General Model for Variance Analysis Actual price is the amount actuallypaid for the input used.14A General Model for Variance Analysis Standard price is the amount that should have been paid for the input used.Price VarianceQuantity Variance Actual Quantity Actual Quantit

12、y Standard Quantity Actual Price Standard Price Standard Price15A General Model for Variance Analysis (AQ AP) (AQ SP) (AQ SP) (SQ SP) AQ = Actual Quantity SP = Standard Price AP = Actual Price SQ = Standard Quantity Price VarianceQuantity Variance Actual Quantity Actual Quantity Standard Quantity Ac

13、tual Price Standard Price Standard Price16Another Way to Look at the Problems:The line-by-line method17Learning Objective 1Compute the direct materials price and quantity variances and explain their significance.18 Glacier Peak Outfitters has the following direct material standard for the fiberfill

14、in its mountain parka.0.1 kg. of fiberfill per parka at $5.00 per kg. Last month 210 kgs. of fiberfill were purchased and used to make 2,000 parkas. The material cost a total of $1,029.Material Variances An Example19Material Variances: The line-by-line method Calculation of Actual Purchase Price (AP

15、) per unit can be done but is not necessary because AP will not be used in subsequent calculations and the total actual purchase cost in total is sufficient for the variance calculation. 20 210 kgs. 210 kgs. 200 kgs. $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance

16、$21 favorableQuantity variance$50 unfavorable Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard PriceMaterial Variances Summary:The tradition method21 210 kgs. 210 kgs. 200 kgs. $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance$2

17、1 favorableQuantity variance$50 unfavorable Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard Price$1,029 210 kgs = $4.90 per kgMaterial Variances Summary:The tradition method22 210 kgs. 210 kgs. 200 kgs. $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,05

18、0 = $1,000 Price variance$21 favorableQuantity variance$50 unfavorable Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard Price0.1 kg per parka 2,000 parkas = 200 kgsMaterial Variances Summary:The tradition method23Material Variances:Using the Factored EquationsMa

19、terials price varianceMPV = AQ (AP - SP) = 210 kgs ($4.90/kg - $5.00/kg) = 210 kgs (-$0.10/kg) = $21 FMaterials quantity varianceMQV = SP (AQ - SQ) = $5.00/kg (210 kgs-(0.1 kg/parka 2,000 parkas) = $5.00/kg (210 kgs - 200 kgs) = $5.00/kg (10 kgs) = $50 U24Isolation of Material VariancesI need the pr

20、ice variancesooner so that I can betteridentify purchasing problems.You accountants just dontunderstand the problems thatpurchasing managers have.Ill start computingthe price variancewhen material ispurchased rather than when its used.25Material VariancesHanson purchased and used 1,700 pounds. How a

21、re the variances computed if the amount purchased differs from the amount used? The price variance is computed on the entire quantity purchased.The quantity variance is computed only on the quantity used.26Materials Quantity VarianceProduction ManagerMaterials Price VariancePurchasing ManagerThe sta

22、ndard price is used to compute the quantity varianceso that the production manager is not held responsible forthe purchasing managers performance.Responsibility for Material Variances27Your poor scheduling sometimes requires me to rush order material at a higher price, causing unfavorable price vari

23、ances. I am not responsible for this unfavorable materialquantity variance. You purchased cheapmaterial, so my peoplehad to use more of it.Responsibility for Material Variances28 Hanson Inc. has the following direct material standard to manufacture one Zippy:1.5 pounds per Zippy at $4.00 per pound L

24、ast week, 1,700 pounds of material were purchased and used to make 1,000 Zippies. The material cost a total of $6,630. ZippyQuick Check 29Quick Check Zippy Hansons material price variance (MPV)for the week was:a.$170 unfavorable.b.$170 favorable.c.$800 unfavorable.d.$800 favorable.30 Hansons materia

25、l price variance (MPV)for the week was:a.$170 unfavorable.b.$170 favorable.c.$800 unfavorable.d.$800 favorable. MPV = AQ(AP - SP) MPV = 1,700 lbs. ($3.90 - 4.00) MPV = $170 FavorableQuick Check Zippy31Quick Check Hansons material quantity variance (MQV)for the week was:a.$170 unfavorable.b.$170 favo

26、rable.c.$800 unfavorable.d.$800 favorable.Zippy32 Hansons material quantity variance (MQV)for the week was:a.$170 unfavorable.b.$170 favorable.c.$800 unfavorable.d.$800 favorable. MQV = SP(AQ - SQ) MQV = $4.00(1,700 lbs - 1,500 lbs) MQV = $800 unfavorableQuick Check Zippy33Quick Check Summary: The l

27、ine-by-line methodZippy34 1,700 lbs. 1,700 lbs. 1,500 lbs. $3.90 per lb. $4.00 per lb. $4.00 per lb. = $6,630 = $ 6,800 = $6,000 Price variance$170 favorableQuantity variance$800 unfavorable Actual Quantity Actual Quantity Standard Quantity Actual Price Standard Price Standard PriceZippyQuick Check

28、Summary: The traditional method35 Hanson Inc. has the following material standard to manufacture one Zippy:1.5 pounds per Zippy at $4.00 per pound Last week, 2,800 pounds of material were purchased at a total cost of $10,920, and 1,700 pounds were used to make 1,000 Zippies. ZippyQuick Check Continu

29、ed36Quick Check ContinuedThe line-by-line methodZippy37 Actual Quantity Actual Quantity Purchased Purchased Actual Price Standard Price 2,800 lbs. 2,800 lbs. $3.90 per lb. $4.00 per lb. = $10,920 = $11,200 Price variance$280 favorable Price variance increases because quantity purchased increases.Zip

30、pyQuick Check ContinuedThe traditional method38 Actual Quantity Used Standard Quantity Standard Price Standard Price 1,700 lbs. 1,500 lbs. $4.00 per lb. $4.00 per lb. = $6,800 = $6,000 Quantity variance$800 unfavorableQuantity variance is unchanged because actual and standard quantities are unchange

31、d.ZippyQuick Check ContinuedThe traditional method39Learning Objective 2Compute the direct labor rate and efficiency variances and explaintheir significance. 40 Glacier Peak Outfitters has the following direct labor standard for its mountain parka.1.2 standard hours per parka at $10.00 per hour Last

32、 month, employees actually worked 2,500 hours at a total labor cost of $26,250 to make 2,000 parkas. Labor Variances An Example41Labor Variances42Rate variance$1,250 unfavorableEfficiency variance$1,000 unfavorable Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard RateLabor

33、 Variances Summary: The Traditional Method 2,500 hours 2,500 hours 2,400 hours $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 43Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 A

34、ctual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard Rate$26,250 2,500 hours = $10.50 per hourRate variance$1,250 unfavorableEfficiency variance$1,000 unfavorable44Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours $10.50 per hour $10.00 per hour. $10.00 per hour = $26

35、,250 = $25,000 = $24,000 Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard Rate1.2 hours per parka 2,000 parkas = 2,400 hoursRate variance$1,250 unfavorableEfficiency variance$1,000 unfavorable45Labor Variances:Using the Factored EquationsLabor rate varianceLRV = AH (AR - S

36、R) = 2,500 hours ($10.50 per hour $10.00 per hour) = 2,500 hours ($0.50 per hour) = $1,250 unfavorableLabor efficiency varianceLEV = SR (AH - SH) = $10.00 per hour (2,500 hours 2,400 hours) = $10.00 per hour (100 hours) = $1,000 unfavorable46Responsibility for Labor VariancesProduction ManagerProduc

37、tion managers areusually held accountablefor labor variancesbecause they caninfluence the:Mix of skill levelsassigned to work tasks. Level of employee motivation.Quality of production supervision.Quality of training provided to employees.47I am not responsible for the unfavorable laborefficiency var

38、iance! You purchased cheapmaterial, so it took moretime to process it. I think it took more time to process the materials because the Maintenance Department has poorly maintained your equipment.Responsibility for Labor Variances48 Hanson Inc. has the following direct laborstandard to manufacture one

39、 Zippy: 1.5 standard hours per Zippy at$12.00 per direct labor hour Last week, 1,550 direct labor hours wereworked at a total labor cost of $18,910to make 1,000 Zippies. ZippyQuick Check 49 Hansons labor rate variance (LRV) for the week was:a. $310 unfavorable.b. $310 favorable.c. $300 unfavorable.d

40、. $300 favorable.Quick Check Zippy50 Hansons labor rate variance (LRV) for the week was:a. $310 unfavorable.b. $310 favorable.c. $300 unfavorable.d. $300 favorable.Quick Check LRV = AH(AR - SR) LRV = 1,550 hrs($12.20 - $12.00) LRV = $310 unfavorableZippy51 Hansons labor efficiency variance (LEV)for

41、the week was:a. $590 unfavorable.b. $590 favorable.c. $600 unfavorable.d. $600 favorable.Quick Check Zippy52 Hansons labor efficiency variance (LEV)for the week was:a. $590 unfavorable.b. $590 favorable.c. $600 unfavorable.d. $600 favorable.Quick Check LEV = SR(AH - SH) LEV = $12.00(1,550 hrs - 1,50

42、0 hrs) LEV = $600 unfavorableZippy53Quick Check : Summary of the line-by-line method54 Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard RateRate variance$310 unfavorableEfficiency variance$600 unfavorable 1,550 hours 1,550 hours 1,500 hours $12.20 per hour $12.00 per hour

43、$12.00 per hour = $18,910 = $18,600 = $18,000 ZippyQuick Check :Summary of the traditional method55Learning Objective 3Compute the variable manufacturing overhead rate and efficiency variances.56 Glacier Peak Outfitters has the following direct variable manufacturing overhead labor standard for its

44、mountain parka.1.2 standard hours per parka at $4.00 per hour Last month, employees actually worked 2,500 hours to make 2,000 parkas. Actual variable manufacturing overhead for the month was $10,500. Variable Manufacturing Overhead Variances An Example57Variable Manufacturing Overhead Variances:The

45、line-by-line method58 2,500 hours 2,500 hours 2,400 hours $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Rate variance$500 unfavorableEfficiency variance$400 unfavorable Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard RateVariable Manufacturing

46、Overhead Variances Summary: The traditional method59 Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Rate variance$500 unfavorableEfficiency variance$400 unf

47、avorable$10,500 2,500 hours = $4.20 per hourVariable Manufacturing Overhead Variances Summary: The traditional method60 Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,00

48、0 = $9,600 Rate variance$500 unfavorableEfficiency variance$400 unfavorable1.2 hours per parka 2,000 parkas = 2,400 hoursVariable Manufacturing Overhead Variances Summary: The traditional method61Variable Manufacturing Overhead Variances: Using Factored EquationsVariable manufacturing overhead rate

49、varianceVMRV = AH (AR - SR) = 2,500 hours ($4.20 per hour $4.00 per hour) = 2,500 hours ($0.20 per hour) = $500 unfavorableVariable manufacturing overhead efficiency varianceVMEV = SR (AH - SH) = $4.00 per hour (2,500 hours 2,400 hours) = $4.00 per hour (100 hours) = $400 unfavorable62 Hanson Inc. h

50、as the following variablemanufacturing overhead standard tomanufacture one Zippy: 1.5 standard hours per Zippy at$3.00 per direct labor hour Last week, 1,550 hours were worked to make1,000 Zippies, and $5,115 was spent forvariable manufacturing overhead.ZippyQuick Check 63 Hansons rate variance (VMR

51、V) for variable manufacturing overhead for the week was:a.$465 unfavorable.b.$400 favorable.c.$335 unfavorable.d.$300 favorable.Quick Check Zippy64 Hansons rate variance (VMRV) for variable manufacturing overhead for the week was:a.$465 unfavorable.b.$400 favorable.c.$335 unfavorable.d.$300 favorabl

52、e.Quick Check VMRV = AH(AR - SR) VMRV = 1,550 hrs($3.30 - $3.00) VMRV = $465 unfavorableZippy65 Hansons efficiency variance (VMEV) for variable manufacturing overhead for the week was:a.$435 unfavorable.b.$435 favorable.c.$150 unfavorable.d.$150 favorable.Quick Check Zippy66 Hansons efficiency varia

53、nce (VMEV) for variable manufacturing overhead for the week was:a.$435 unfavorable.b.$435 favorable.c.$150 unfavorable.d.$150 favorable.Quick Check VMEV = SR(AH - SH) VMEV = $3.00(1,550 hrs - 1,500 hrs) VMEV = $150 unfavorable1,000 units 1.5 hrs per unitZippy67Quick Check Summary: The line-by-line m

54、ethod68Rate variance$465 unfavorableEfficiency variance$150 unfavorable 1,550 hours 1,550 hours 1,500 hours $3.30 per hour $3.00 per hour $3.00 per hour = $5,115 = $4,650 = $4,500 Actual Hours Actual Hours Standard Hours Actual Rate Standard Rate Standard RateZippyQuick Check The traditional method6

55、9Variance Analysis and Management by ExceptionHow do I knowwhich variances to investigate? Larger variances, in dollar amount or as a percentage of the standard, are investigated first. 70A Statistical Control Chart123456789Variance MeasurementsFavorable Limit Unfavorable Limit Warning signals for i

56、nvestigationDesired Value 71Advantages of Standard CostsManagement byexceptionAdvantagesPromotes economy and efficiencySimplifiedbookkeepingEnhances responsibilityaccounting72PotentialProblemsEmphasis onnegative mayimpact morale.Emphasizing standardsmay exclude otherimportant objectives.Favorablevar

57、iances maybe misinterpreted.Continuous improvement maybe more importantthan meeting standards.Standard costreports maynot be timely.Invalid assumptionsabout the relationshipbetween laborcost and output.Potential Problems with Standard Costs73Generalized Model of the Row by Row Approach and Its Prepa

58、ration of the Performance Report (Reconcile Actual Results to the Budgeted Figures) Supplementary NoteGeneralized Model of the Row by Row Approach and Its Preparation of the Performance Report (Reconcile Actual Results to the Budgeted Figures) 75Performance Report for Variance Analysis: Recall Examp

59、le from Chapter 1176Predetermined Overhead Rates and Overhead Analysis in a Standard Costing SystemAppendix 12ALearning Objective 4(Appendix 12A)Compute and interpret the fixed overhead budget and volume variances.78Fixed Manufacturing Overhead Variances: The line-by-line method79Budget varianceFixe

60、d Overhead Budget Variance:The traditional methodActualFixedOverheadFixedOverheadAppliedBudgetedFixedOverheadBudgetvarianceBudgetedfixedoverheadActualfixedoverhead=80VolumevarianceFixed Overhead Volume Variance:The traditional methodActualFixedOverheadFixedOverheadAppliedBudgetedFixedOverheadVolumev