ACCT208 Lecture Notes - Lecture 10: Deutsche Luft Hansa, Standard Cost Accounting
27 Jun 2018
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Handout 3:
1. POHRS
a) VPOHR - $3.00 because it says so!
b) FPOHR: Est FOH/Estimated CD Units
In standard costing, Total CD units used to compute our POHRs is called Denominator Level
$30,000 $30,000 #ERROR!
(3,000 units x 4 DLH) 12,000
$400 $300 Applied OH Q's are your CD Units
AQ x AP AQ x SP SQ x SP Two Stepper
$700 9700 2400 x 4 9600 Actual Production x unit SQ
x ???? x $3 x $3
$28,700 29100 28800
400 F 300 U
You paid less than the budget Because you used 100 hours more than you should have to make 2400
B. Difference Between Normal Costing and Standard Costing
Normal Costing: Apply OH to units: POHR x Actual number of CD units on the job (DLH or MH)
Standard Costing:
Apply OH to units: POHR (SP when you analyze later) x Standard Hours allowed for Actual Production (Total SQ)
Normal Cost Standard Cost
Actual OH Applied OH Actual OH Applied OH
Actual OH Incurred for Yr. Applied to our Units Actual OH incurred Applied to Units
AQ x POHR SQ x POHR (known as SP) or SQ x SP
Under or Overapplied OH Under or Overapplied OH
C. Look at FOH - Template different
Actual OH Budgeted FOH Applied FOH or SQ x SP
FOH budget variance FOH Volume Variance
1. Budget Variance: Difference between actual FOH and the original budgeted OH for the year
"How much should have been spent to how much was?"
2. Volume Variance: Measure of how well we used our facilities
Did our actual production exceed or was it below our budgeted production?
Document Summary
Handout 3: pohrs, vpohr - . 00 because it says so, fpohr: est foh/estimated cd units. In standard costing, total cd units used to compute our pohrs is called denominator level. Because you used 100 hours more than you should have to make 2400: difference between normal costing and standard costing. Normal costing: apply oh to units: pohr x actual number of cd units on the job (dlh or mh) Standard costing: apply oh to units: pohr (sp when you analyze later) x standard hours allowed for actual production (total sq) Sq x pohr (known as sp) or sq x sp. Overapplied oh: look at foh - template different. Foh volume variance: budget variance: difference between actual foh and the original budgeted oh for the year. "how much should have been spent to how much was?: volume variance: Measure of how well we used our facilities. "u" = co. operated below what was planned.
