About This Chapter
Standard Costs - Chapter Summary and Learning Objectives
Standard costs are related to things like labor and material costs. This makes it an important topic in accounting. This chapter analyzes standard costs and explains the difference between different costing systems. The engaging video lessons in this chapter are narrated by a knowledge instructor who will help you better understand standard costs. Take the quiz after each lesson to test your understanding of the main points.
- The definition of standard cost and how it is set
- How to calculate direct materials and direct labor variances
- Ways to prepare variance reports
- The balanced scorecard approach for performance evaluations
- The standard cost and job order accounting systems
|Standard Costs: Definition & Advantages||Classify standard costs and learn what its advantages are.|
|How Companies Set Standard Costs||Evaluate the process of setting standard cost.|
|Calculating Direct Materials & Direct Labor Variances||Assess the formulas for calculating direct materials and direct labor variances.|
|How to Prepare & Format Variance Reports||Consider how variances reports are prepared and the information used in them.|
|Preparing Standard Cost Income Statements||Explain how to prepare an income statement under the standard costing systems.|
|Balanced Scorecard Approach to Performance Evaluations||Focus on how the balanced scorecard approach is used.|
|Standard Cost Accounting System: Benefits & Limitations||Survey the advantages and disadvantages of the standard cost accounting system.|
|Standard Cost vs. Job Order Cost Accounting Systems||Differentiate between the standard cost and job order cost accounting systems.|
|Standard Cost vs. Job Order Cost Overhead & Volume Variance||Express the two basic variances that arise from a standard cost system.|
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 301: Applied Managerial Accounting course
- Corporate Governance for Managerial Accounting
- Financial Statements & Balance Sheets
- Cost Classifications
- Manufacturing Overhead Cost Allocation
- Job Order Cost System
- Process Cost System
- Activity-Based Costing
- Cost-Volume-Profit Analysis
- Decision Making in Managerial Accounting
- Pricing Objectives & Methods
- Budgetary Control
- Capital Budgeting
- Statement of Cash Flows
- Financial Statement Analysis
- Software for Managerial Accounting
- Required Assignments for Accounting 301
- Studying for Accounting 301