Power Notes Chapter 21 Performance Evaluation, Variances from Standards Learning Objectives 1. Standards 2. Budgetary Performance Evaluation 3. Direct.

Slides:

Advertisements

Similar presentations

Chapter 15 Fundamentals of Variance Analysis Learning Objectives 4.Prepare and use a profit variance analysis. 2.Develop and use flexible budgets.

Advertisements

Standard Costing and Variances

Cost Variances for Fixed and Variable Overhead Variances for Variable Overhead Variances for Fixed Overhead.

Chapter 10 Key topics: –Budget objectives and cycle –Static versus flexible budgets –Budget variances –Developing and using flexible budgets –Other types.

Flexible Budgets and Standard Cost Systems

Using Variances under Standard Cost System

PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Copyright.

Additional Topics in Variance Analysis Chapter 17 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

Manufacturing Overhead Variances Managerial Accounting Prepared by Diane Tanner University of North Florida Chapter 46.

Copyright © 2003 Pearson Education Canada Inc. Slide 7-91 Chapter 8 Flexible Budgets, Variances, and Management Control: II.

23 Performance Evaluation Using Variances from Standard Costs

8 - 1 StandardStandard/Budget AdvantageAdvantage of Standard Costs StandardStandard Setting Direct Materials- Direct Labor Var Manufacturing Manufacturing.

PowerPointPresentation by PowerPoint Presentation by Gail B. Wright Professor of Accounting Bryant University © Copyright 2007 Thomson South-Western, a.

Budgeting and Standard Cost Systems Chapter 13. Budgeting A budget is a financial and quantitative plan for the acquisition and use of resources Use for.

Financial and Managerial Accounting

8-1 Fundamental Managerial Accounting Concepts Thomas P. Edmonds Bor-Yi Tsay Philip R. Olds Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights.

McGraw-Hill/IrwinCopyright ©2008 The McGraw-Hill Companies, Inc. All rights reserved. Fundamentals of Variance Analysis Chapter 16.

CHAPTER 8 Performance Evaluation. The McGraw-Hill Companies, Inc. 2008McGraw-Hill/Irwin 8-2 Learning Objective LO1 To describe flexible and static budgets.

Chapter 23 Flexible Budgets and Standard Cost Systems

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 21 Flexible Budgets and Standard Costing.

@ 2012, Cengage Learning Performance Evaluation Using Variances from Standard Costs LO 4 – Computing Factory Overhead Variances.

IES 342 Industrial Cost Analysis & Control | Dr. Karndee Prichanont, SIIT 1 The Flexible Budget and Standard Costing Chapter 13 Objectives: Develop and.

Controlling Manufacturing Costs: Standard Costs

1 Click to edit Master title style Performance Evaluation Using Variances From Standard Costs 7.

Do other companies like BMW Group use manufacturing standards to guide performance at their plants? 1.Yes 2.No.

© The McGraw-Hill Companies, Inc., 2005 McGraw-Hill/Irwin 24-1 STANDARD COST SYSTEMS Chapter 24.

1 Chapter Eleven Standard Costs and Variance Analysis.

@ 2012, Cengage Learning Performance Evaluation Using Variances from Standard Costs LO 2 – Understanding How Standards are Used in Budgeting.

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Standard Costing System Chapter 4 Managerial Accounting Concepts and Empirical Evidence.

Chapter 22 Performance Evaluation Using Variances from Standard Costs Accounting, 21 st Edition Warren Reeve Fess PowerPoint Presentation by Douglas Cloud.

ACC3200 STANDARD COSTING.

Chapter 16 Fundamentals of Variance Analysis.

@ 2012, Cengage Learning Performance Evaluation Using Variances from Standard Costs LO 3 – Computing Direct Materials and Direct Labor Variances.

©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publically accessible website, in whole or in part.

24 - 1©2002 Prentice Hall, Inc. Business Publishing Accounting, 5/E Horngren/Harrison/Bamber Flexible Budgets and Standard Costs Chapter 24.

1 Chapter 10. Standard Costs. M11-Chp-10-1-Standard-Costs Edited May 24, Copyright © 2011, Dr. Howard Godfrey This file contains illustrative.

PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D.,

Performance Evaluation and Using Variances Chapter M6.

AC239 Managerial Accounting Seminar 7 Jim Eads, CPA, MST, MSF Performance Evaluation Using Variances from Standard Costs 1.

© The McGraw-Hill Companies, Inc., 2002 McGraw-Hill/Irwin Standard Cost Systems Chapter 23.

Financial and Managerial Accounting Wild, Shaw, and Chiappetta Fourth Edition Wild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011.

Copyright © 2007 Prentice-Hall. All rights reserved 1 Flexible Budgets and Standard Costs Chapter 11.

Standard Costing and Variance Analysis

Chapter 9 Introduction to a Standard Cost System.

Accounting Principles Using Excel for Success PowerPoint Presentation by: Douglas Cloud, Professor Emeritus Accounting, Pepperdine University.

AC239 Managerial Accounting Seminar 7 Jim Eads, CPA, MST, MSF Performance Evaluation Using Variances from Standard Costs 1.

AC239 Unit 7 Chapter 23 Performance Evaluation Using Variances from Standard Costs.

Part 1 Study Unit 7 Review Jim Clemons, CMA.

Chapter 17 Inventory & Control What we will cover: n Standard costs n Variance Analysis.

Flexible Budgets Static Budget Based on estimate of sales and production levels Compare costs associated with actual production to costs for budgeted production.

Chapter 17 Overhead Cost Management Flexible Budgets.

Chapter 23 Flexible Budgets and Standard Cost Systems.

Flexible Budgets and Standard Costs Chapter 24. Objective 1 Prepare a Flexible Budget for the Income Statement.

C Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.

Flexible Budgets/Variances I Chapter Seven. Static Budget Example Webb Co. manufactures and sells jackets. Budgeted variable costs per jacket are as follows:

Chapter 19 Manufacturing Overhead Standard Costs: Completing the Accounting Cycle for Standards costs.

17 Flexible Budgets, Overhead Cost Management, and Activity-Based Budgeting.

Power Notes Chapter M6 Performance Evaluation, Variances from Standards Learning Objectives 1. Standards 2. Budgetary Performance Evaluation 3. Direct.

Chapter 22 Performance Evaluation Using Variances from Standard Costs

Managerial Accounting

Foundations and Evolutions

Prepared by: C. Douglas Cloud Professor Emeritus of Accounting Pepperdine University © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned,

Performance Evaluation Using Variances from Standard Costs

Standard Cost Accounting Materials, Labor, and Factory Overhead

Variance Analysis–A Tool for Cost Control and Performance Evaluation

Power Notes Chapter M6 Performance Evaluation, Variances from Standards Learning Objectives 1. Standards 2. Budgetary Performance Evaluation 3. Direct.

Flexible Budgets, Variances, and Management Control: I

Presentation transcript:

Power Notes Chapter 21 Performance Evaluation, Variances from Standards Learning Objectives 1. Standards 2. Budgetary Performance Evaluation 3. Direct Materials Variances 4. Direct Labor Variances 5. Factory Overhead Variances 6. Recording and Reporting Variances from Standards 7. Standards for Nonmanufacturing Expenses 8. Nonfinancial Performance Measures C21

Power Notes Chapter 21 Performance Evaluation, Variances from Standards Slide # Power Note Topics 3 6 13 20 Standard Costs, Performance Reports Direct Materials Variances Direct Labor Variances Factory Overhead Variances Note: To select a topic, type the slide # and press Enter.

Standards — Performance Benchmarks Setting Standards Requires joint efforts of accountants, engineers, and other management personnel. Theoretical standards (ideal standards). Currently attainable standards (normal standards). Should be revised when they no longer reflect operating conditions they intended to measure. Types of Standards Reviewing and Revising Standards

Standard Cost per Pair of XL Jeans Western Rider Inc. Standard Cost per Pair of XL Jeans Direct Materials: $5.00 per square yard x 1.5 square yards $7.50 $9.00 per hour x .80 hours per pair 7.20 $6.00 per hour x .80 hours per pair 4.80 Total standard cost per pair $19.50 Direct Labor: Factory Overhead:

Budget Performance Report For the Month Ended June 30, 2003 Western Rider Inc. Budget Performance Report For the Month Ended June 30, 2003 Actual Flexible Cost Manufacturing Costs Costs Budget Variance Direct materials $40,150 $37,500 $2,650 Direct labor 38,500 36,000 2,500 Factory overhead 22,400 24,000 (1,600) Total mfg. costs $101,050 $97,500 $3,550

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 Total units produced x 5,000 Total yards 7,500 Price per yard x $5.00 Total dollars $37,500 The standard is based on the actual units produced.

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 Total units produced x 5,000 Total yards 7,500 Price per yard x $5.00 Total dollars $37,500 $5.00 The total of this box is: $5.00 x 7,500 yards price $37,500 quantity 7,500

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 1.46 .04 F (quantity) Total units produced x 5,000 x 5,000 Total yards 7,500 7,300 200 F (quantity) Price per yard x $5.00 x $5.50 $.50 U (price) Total dollars $37,500 $40,150 $2,650 U (total) Actual results are: 200 yards under standard $.50 per yard over standard $2,650 over standard

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 1.46 .04 F (quantity) Total units produced x 5,000 x 5,000 Total yards 7,500 7,300 200 F (quantity) Price per yard x $5.00 x $5.50 $.50 U (price) Total dollars $37,500 $40,150 $2,650 U (total) $5.50 Actual cost. $40,150 The total of this box is: $5.50 x 7,300 yards price quantity 7,300

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 1.46 .04 F (quantity) Total units produced x 5,000 x 5,000 Total yards 7,500 7,300 200 F (quantity) Price per yard x $5.00 x $5.50 $.50 U (price) Total dollars $37,500 $40,150 $2,650 U (total) Unfavorable price variance ($.50 x 7,300 yards) $5.50 $3,650 $5.00 Who is responsible for an unfavorable price variance? price quantity 7,300 7,500

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 1.46 .04 F (quantity) Total units produced x 5,000 x 5,000 Total yards 7,500 7,300 200 F (quantity) Price per yard x $5.00 x $5.50 $.50 U (price) Total dollars $37,500 $40,150 $2,650 U (total) Who is responsible for a favorable quantity variance? $5.50 $5.00 Favorable quantity variance (200 yards x $5.00) price $1,000 quantity 7,300 7,500

Direct Materials Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Square yards per unit 1.50 1.46 .04 F (quantity) Total units produced x 5,000 x 5,000 Total yards 7,500 7,300 200 F (quantity) Price per yard x $5.00 x $5.50 $.50 U (price) Total dollars $37,500 $40,150 $2,650 U (total) Unfavorable price variance ($.50 x 7,300 yards) $5.50 $3,650 $5.00 Favorable quantity variance (200 yards x $5.00) price $1,000 quantity 7,300 7,500

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 Total units produced x 5,000 Total hours 4,000 Rate per hour x $9.00 Total dollars $36,000 The standard is based on the actual units produced.

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 Total units produced x 5,000 Total hours 4,000 Rate per hour x $9.00 Total dollars $36,000 $9.00 The total of this box is: $9.00 x 4,000 hours rates $36,000 hours 4,000

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 .77 .03 F (time) Total units produced x 5,000 x 5,000 Total hours 4,000 3,850 150 F (time) Rate per hour x $9.00 x $10.00 $1.00 U (rate) Total dollars $36,000 $38,500 $2,500 U (total Actual results are: 150 hours under standard $1.00 per hour over standard $2,500 over standard

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 .77 .03 F (time) Total units produced x 5,000 x 5,000 Total hours 4,000 3,850 150 F (time) Rate per hour x $9.00 x $10.00 $1.00 U (rate) Total dollars $36,000 $38,500 $2,500 U (total $10.00 Actual cost. $38,500 The total of this box is: $10.00 x 3,850 hours rates hours 3,850

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 .77 .03 F (time) Total units produced x 5,000 x 5,000 Total hours 4,000 3,850 150 F (time) Rate per hour x $9.00 x $10.00 $1.00 U (rate) Total dollars $36,000 $38,500 $2,500 U (total) Unfavorable rate variance ($1.00 x 3,850 hours) $10.00 $3,850 $9.00 Who is responsible for an unfavorable rate variance? rates hours 3,850 4,000

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 .77 .03 F (time) Total units produced x 5,000 x 5,000 Total hours 4,000 3,850 150 F (time) Rate per hour x $9.00 x $10.00 $1.00 U (rate) Total dollars $36,000 $38,500 $2,500 U (total) Who is responsible for a favorable time variance? $10.00 $9.00 Favorable time variance (150 hours x $9.00) rates $1,350 hours 3,850 4,000

Direct Labor Variance Report For the Month Ended June 30, 2003 Description Standard Actual Variance Hours per unit .80 .77 .03 F (time) Total units produced x 5,000 x 5,000 Total hours 4,000 3,850 150 F (time) Rate per hour x $9.00 x $10.00 $1.00 U (rate) Total dollars $36,000 $38,500 $2,500 U (total) Unfavorable rate variance ($1.00 x 3,850 hours) $10.00 $3,850 $9.00 Favorable time variance (150 hours x $9.00) rates $1,350 hours 3,850 4,000

Factory Overhead Cost Budget For the Month Ended June 30, 2003 Western Rider Inc. Factory Overhead Cost Budget For the Month Ended June 30, 2003 Direct Labor Hours 4,000 4,500 5,000 Total variable costs $14,400 $16,200 $18,000 Variable costs per hour $ 3.60 $ 3.60 $3.60 Total fixed costs $12,000 $12,000 $12,000 Fixed costs per hour $ 3.00 $ 2.67 $ 2.40 Total costs per hour $ 6.60 $ 6.27 $ 6.00 Overhead is applied at $6.00 per direct labor hour based on estimated 5,000 total hours.

Factory Overhead Variances For the Month Ended June 30, 2003 Western Rider Inc. Factory Overhead Variances For the Month Ended June 30, 2003 Revised Actual Budget Costs Variance Variable costs $14,400 $10,400 $4,000 F ($3.60 x 4,000 hours) Fixed costs 9,600 12,000 2,400 U ($2.40 x 4,000 hours) Total costs $24,000 $22,400 $1,600 F Factory overhead applied at $6.00 per direct labor hour based on 4,000 actual hours. Actual factory overhead per general ledger.

Factory Overhead Variances For the Month Ended June 30, 2003 Western Rider Inc. Factory Overhead Variances For the Month Ended June 30, 2003 Revised Actual Budget Costs Variance Variable costs $14,400 $10,400 $4,000 F ($3.60 x 4,000 hours) Fixed costs 9,600 12,000 2,400 U ($2.40 x 4,000 hours) Total costs $24,000 $22,400 $1,600 F Controllable variance based on variable costs

Factory Overhead Variances For the Month Ended June 30, 2003 Western Rider Inc. Factory Overhead Variances For the Month Ended June 30, 2003 Revised Actual Budget Costs Variance Variable costs $14,400 $10,400 $4,000 F ($3.60 x 4,000 hours) Fixed costs 9,600 12,000 2,400 U ($2.40 x 4,000 hours) Total costs $24,000 $22,400 $1,600 F Volume variance based on fixed costs

Actual variable overhead $10,400 Budgeted variable overhead 14,400 Variable Factory Overhead Controllable Variance For the Month Ended June 30, 2003 Actual variable overhead $10,400 Budgeted variable overhead 14,400 (4,000 actual hours x $3.60) Favorable controllable variance $(4,000) Controllable variance measures the efficiency of using variable overhead resources. A revised budget based on the actual hours used

Budgeted volume (direct labor hours) 5,000 Fixed Factory Overhead Volume Variance For the Month Ended June 30, 2003 Budgeted volume (direct labor hours) 5,000 Actual volume (direct labor hours) 4,000 Capacity not used (direct labor hours) 1,000 Standard fixed rate x $2.40 Unfavorable volume variance $2,400 Volume variance measures the utilization of fixed overhead resources. Rate based on 5,000 direct labor hours.

Power Notes This is the last slide in Chapter 21. Chapter 21 Performance Evaluation, Variances from Standards This is the last slide in Chapter 21. Note: To see the topic slide, type 2 and press Enter.