COMM 305 Chapter Notes - Chapter 12: Cost Accounting, Mqv, Balanced Scorecard
12 Apr 2017
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Standard cost - predetermined unit cost used as measures of performance. Standard is budgeted cost per unit of product. Therefore concerned with each individual cost component that makes up entire budget. Budget data not journalized in cost accounting systems. Standard costs sometimes used in cost accounting systems. Company may report its inventories at standard cost in its financial statements. Would not report inventories at budgeted costs. Ideal standard - based on optimum level of performance under perfect operating conditions. Normal standard - based on efficient level of performance attainable under expected operating conditions. Direct materials price standard - cost per unit of dm that should be incurred. Standard predetermined overhead rate - oh rate determined by dividing budgeted overhead costs by expected standard activity index. Normal capacity - average capacity output that company should experience over long run. Variance - difference between total actual costs and total standard costs.
