Variance Analysis Chapter 18 ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007

What a standard is Figures 18.1 page 728

Standard costing system Figure 18.1 page 728

Purposes Provide a prediction of future costs Provide a challenging target Assist in setting budgets, and in evaluating performance For Management By Exception For tracing costs to products for inventory valuation Figure 18.2 page 735 Figure 18.3 page 737

Next, we… will look at one of the areas to which I have referred to many times earlier in the course: divisional financial performance, with measures such as Return On Investments, ROI Chapter 20