Hi Raju! This is Part 2 of the topic 'Standard Costing'. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-RCyzlz4R3MI.html Will be uploading the videos on standard costing in the coming weeks. Do click the bell icon so that you will receive notifications as and when uploads are done.
That was an superb session. A quick query DM Price Variance multilpled with AQ [and not SQ] & in Usage variance why we dont multiply with AP rather we used SP. Pls give a clarity?
Standard cost of 1 raw material for making a cake ( 3 eggs x ₹ 5 = ₹ 15). Actual cost ( 5 eggs x ₹ 6 =₹ 30) Hence DM total variance = 30 - 15 = 15 (Adverse) Now purchase manager made a mistake by paying ₹ 1 extra for each egg that he bought. Hence price variance = 5 eggs x ₹ 1 = 5 (adverse) Here we have to use actual quantity coz the loss that the company suffers ( ₹ 1 per egg) is for the actual quantity of eggs bought. Now, the chef ( production manager) made a mistake of using 2 eggs extra. How can the chef be held responsible for the extra ₹ 1 paid by the purchase manager? If you use the actual price for calculating the usage variance, you are unjustly crucifying the production manager for a fault done by the purchase manager. Hence the usage variance has to be valued at std price i.e. extra 2 eggs x ₹ 5 = 10( adverse). Hence the total DM variance = Price variance ₹ 5 (adverse) + Usage variance ₹ 10 (adverse) = ₹ 15 (adverse)
@UCkCbseWBaLW7N9ZKv6tRqKA Standard selling price per unit $70 Standard direct materials cost(5kg × $2 per kg). $ 10 per kg Budgeted total material cost of sales $2300 per month. Budgeted profit margin $6900 per month Actual results for February Sales revenue $ 15,200 Total direct material cost $ 2400 Direct materials price variance $ 800 Adv Direct materials usage variance $400 fav What was the actual production in feb ? What was the actual usage of direct metrial during the feb ? I tried many time but cannot able to do ? Please help this questions
Dear Teacher, There is no video for labour Mix and Yield Variance (Advance). I didn't find it. Please, I would like to request you to give your guide line how to learn about this topic? (OR) Would you like to explain me about this topic?
Labour mix and yield variance is exactly similar to material mix and yield variance. Just like materials, where there are expensive & cheap materials, direct labour has expensive ( skilled labour) and cheap labour( unskilled labour). Method of tackling the problem is the same
