Ch 4: Standard Costs in Accounting

About This Chapter

Get a comprehensive overview of standard costs in accounting with help from engaging lessons, mini quizzes and other resources in this chapter. Strengthen your knowledge of this subject to enhance your preparations for a test, boost your grades or gain insight as a casual learner.

Standard Costs in Accounting - Chapter Summary

Whether you are learning about standard costs for the first time or want to refresh your existing knowledge, this chapter can help. Review fun lessons to study the processes involved in calculating direct materials, formatting variance reports, preparing standard cost income statements and much more.

All of the lessons in this chapter are accessible from any computer or mobile device with an Internet connection. Accompanying the lessons are short quizzes designed to assess your comprehension of the concepts you review. When finished with this chapter, you will be prepared to do the following:

  • Analyze standard costs and list their advantages
  • Outline the process companies use to set standard costs
  • Calculate direct labor variances and direct materials
  • Prepare and format variance reports
  • Develop standard cost income statements
  • Explain the basics of the balanced scorecard approach to performance evaluations
  • Differentiate between standard cost and job order cost systems

7 Lessons in Chapter 4: Standard Costs in Accounting
Test your knowledge with a 30-question chapter practice test
Standard Costs: Definition & Advantages

1. Standard Costs: Definition & Advantages

In this lesson, we'll explore the concept of standard costing and some of the advantages that this accounting method affords companies that implement it. When you are through, test your understanding with a quick quiz.

How Companies Set Standard Costs

2. How Companies Set Standard Costs

Managing a company's expenses means managing a lot of changing amounts. Sometimes it's easier to just have a standard cost. But what is a standard cost? This lesson explains the importance of them.

Calculating Direct Materials & Direct Labor Variances

3. Calculating Direct Materials & Direct Labor Variances

Since many budgets are only forecasts, direct materials and direct labor variance calculations allow for changes in actual production costs. In this lesson, we will discuss the details of these variance calculations.

How to Prepare & Format Variance Reports

4. How to Prepare & Format Variance Reports

Finding the variance between a real cost and a standard cost is only helpful if you pass that information on to those who can use it. In this lesson, we learn how to prepare and format variance reports, then look at who uses the information.

Preparing Standard Cost Income Statements

5. Preparing Standard Cost Income Statements

If your firm is going to use a standard cost system of accounting, then you should prepare to deal with plenty of standard cost income statements every accounting period. This lesson shows you how to prepare them.

Balanced Scorecard Approach to Performance Evaluations

6. Balanced Scorecard Approach to Performance Evaluations

Companies set goals and visions for their future. In order to meet those goals and visions they must rely on business methods and tools. In this lesson, we'll learn about one of these tools, called a balanced scorecard.

Standard Cost vs. Job Order Cost Overhead & Volume Variance

7. Standard Cost vs. Job Order Cost Overhead & Volume Variance

Standard costs for manufactured goods are created at the beginning of the year and can differ from actual costs, resulting in variances. In this lesson, you'll learn about rate and volume variances.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support