COMMERCE 2AB3 Chapter Notes - Chapter 12: Standard Cost Accounting, Balanced Scorecard, Cost Accounting
12 Feb 2020
School
Department
Course
Professor
Document Summary
Are often imposed by government agencies (and called regulations) A standard is a unit amount whereas a budget is a total amount. Budget data are not journalized in cost accounting systems. Standard costs may be incorporated into a cost accounting system. Actual cost vs. normal cost vs. standard cost. Promote greater economy by making employees more cost-conscious . Contribute to management control by providing basis for evaluation of cost control and help highlight variances in management by exception. Simplify costing of inventories and reduce clerical costs. Requires input from all persons who have responsibility for costs and quantities. Standards costs need to be current and should be under continuous review. There are two levels of standard costs: Ideal standards represent optimum levels of performance under perfect operating conditions. Normal standards represent efficient levels of performance attainable under expected operating conditions (rigorous but attainable) Direct materials price standard is the cost per unit of direct materials that should be incurred.
