Chapter 10 - Standard costs for control: direct material and direct labour . This chapter presents the following content: Controlling costs, setting standards, calculating standard cost variances, investigating significant variances and taking corrective action, behavioural impact of standard costing, cost control through assigning responsibility, standard costs for product costing. | Chapter 10 Standard costs for control: direct material and direct labour 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline Controlling costs Setting standards Calculating standard cost variances Investigating significant variances and taking corrective action Behavioural impact of standard costing Cost control through assigning responsibility Standard costs for product costing 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Controlling costs Businesses are in control when operations proceed to plan and objectives are achieved Control systems provide regular information to assist in control, which is an essential part of effective resource management Necessary requirements for control A predetermined or standard performance level A measure of actual performance A . | Chapter 10 Standard costs for control: direct material and direct labour 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline Controlling costs Setting standards Calculating standard cost variances Investigating significant variances and taking corrective action Behavioural impact of standard costing Cost control through assigning responsibility Standard costs for product costing 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Controlling costs Businesses are in control when operations proceed to plan and objectives are achieved Control systems provide regular information to assist in control, which is an essential part of effective resource management Necessary requirements for control A predetermined or standard performance level A measure of actual performance A comparison between standard performance and actual performance 10- (cont.) Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Controlling costs (cont.) Standard costing is a part of the budgetary control system All control systems have three basic parts: A predetermined or standard cost is developed A standard cost is a budgeted cost of one unit of product Includes cost of material, labour and overhead The actual cost incurred in the product process is measured The actual cost is compared to the standard cost to determine a cost variance 10- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith (cont.) Controlling costs (cont.) .
