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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

Standard costs are the expected costs of the resources that would be used for the production of an item. Understand the definition, importance, and advantages of standard costing, and learn how to compute for the standard costs.

How Companies Set Standard Costs

2. How Companies Set Standard Costs

Standard costs are the amount expected to pay for goods and services and the costs of labor, materials and overhead need to be taken into consideration when calculating it. Learn about what standard costs are used by companies, why they are used, and how they are set.

Calculating Direct Materials & Direct Labor Variances

3. Calculating Direct Materials & Direct Labor Variances

Learn how to calculate variances with direct materials and direct labor. Variances are changes to the costs an organization has budgeted, they can be either favorable or unfavorable.

How to Prepare & Format Variance Reports

4. How to Prepare & Format Variance Reports

Learn about variance reports and how to prepare and format them, as well as why they are important. Variance reports always need a title, category of variance, the original amount budgeted, actual paid amount, and variance.

Preparing Standard Cost Income Statements

5. Preparing Standard Cost Income Statements

Preparing standard cost income statements help companies plan for future costs. Learn about the preparation of standard cost income statements, counting cost variances, and other elements, such as gross and net profit, that are also indicated in this important financial document.

Balanced Scorecard Approach to Performance Evaluations

6. Balanced Scorecard Approach to Performance Evaluations

Balanced scorecards help companies organize performance compared to the goals within a company. Learn how balanced scorecards keep the vision and mission intact for a company from different perspectives.

Standard Cost vs. Job Order Cost Overhead & Volume Variance

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

Standard cost is a formula that adds up all manufacturing costs and is used to estimate the overall cost. In this lesson you will learn about different kinds of variances and how they relate to standard costs.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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