About This Chapter
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
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the Accounting 303: Cost Accounting course
- Cost Classifications in Accounting
- Costing Methods & Techniques
- Formulas for Cost Accounting
- Job Order Cost System in Accounting
- Process Cost System in Accounting
- Activity-Based Costing Overview
- Product & Service Costing
- Budgetary Process
- Cost Behavior Analysis
- Cost-Volume-Profit Analysis Overview
- Cost Estimation
- Service Department & Joint Cost Allocation
- Cost Accounting for Decision Making
- Ethics in Cost Accounting
- Modern Trends in Accounting
- Required Assignments for Accounting 303
- Studying for Accounting 303