Kế toán, kiểm toán - Chapter 10: Standard costing, operational performance measures, and the balanced scorecard

Chapter 10Standard Costing, Operational Performance Measures, and the Balanced ScorecardManaging CostsStandardcostActualcostComparison between standard and actual performancelevelCostvarianceManagement by ExceptionDirectMaterialManagers focus on quantities and coststhat exceed standards, a practice known as management by exception. Type of Product CostAmountDirectLaborStandardSetting StandardsAnalysis ofHistorical DataTaskAnalysisCostStandards Accountants, engineers, personnel administrators, and production managers combine efforts to set standards based on experience and expectations. Participation in Setting StandardsPerfection versus Practical Standards: A Behavioral IssueShould we usepractical standardsor perfection standards?Practical standardsshould be set at levelsthat are currentlyattainable with reasonable andefficient effort.I agree. Perfection standards areunattainable and therefore discouraging to most employees.Perfection versus Practical Standards: A Behavioral IssueUse of Standards by Service OrganizationsStandard cost analysis may be used in any organization with repetitive tasks.A relationship between tasks and output measures must be established.A General Model for Variance Analysis Actual Quantity Actual Quantity Standard Quantity × × ×  Actual Price Standard Price Standard PricePrice VarianceQuantity Variance Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead Variable overhead  spending variance efficiency variance AQ(AP - SP) SP(AQ - SQ) AQ = Actual Quantity SP = Standard Price AP = Actual Price SQ = Standard Quantity Size of varianceDollar amountPercentage of standardRecurring variancesTrendsControllabilityFavorable variancesCosts and benefits of investigationSignificance of Cost VariancesWhat clues help me to determine the variances that I should investigate?Statistical Control Chart123456789Variance MeasurementsFavorable Limit Unfavorable Limit Desired Value •••••••••Warning signals for investigationIf I buy cheaper materials, my direct-materials expenses will be lower than what is budgeted. Then I’ll get my bonus. But we may lose customers because of lower quality.Behavioral Impact of Standard CostingInteraction among VariancesI am not responsible for the unfavorable laborefficiency variance! You purchased cheapmaterial, so it took moretime to process it. You used too much time because of poorly trained workers and poor supervision.Standard Costs and Product CostingStandard material and labor costsare entered into Work-in-Process inventory instead of actual costs.Standard cost variancesare closed directly toCost of Goods Sold. Advantages of Standard CostingManagement byExceptionStable Product CostsSensible CostComparisonsAdvantagesPerformanceEvaluationEmployeeMotivation