BUS 254 Chapter Notes - Chapter 9: Standard Cost Accounting, Task Analysis, Controllability

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Arsineh Garabedian

Document Summary

Variance: the difference between standard costs (predetermined costs) and actual costs: comparison between standard and actual performance level. A budget for the production of one unit of product or service. The cost chosen to serve as the benchmark in the budgetary control system: determine the total standard or budgeted cost of production. Managers focus on quantities and costs that exceed standards, following up on significant variances. Historical costs can provide a good basis for predicting future costs. Analyze the process of manufacturing a product to determine what it should cost. Management accountant typically works with engineers who are intimately familiar with the production process. Accountants, engineers, personnel administrators, and production managers combine efforts to set standards based on experience and expectations. Should be set at levels that currently attainable with reasonable and efficient effort. Standard cost analysis may be used in any organization with repetitive tasks: relationship between tasks and output measures must be established.