1. Variance Analysis Chapter 18 ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007 Hakan.kullven@indek.kth.se

2. What a standard is Figures 18.1 page 728

3. Standard costing system Figure 18.1 page 728

4. 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

5. 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