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1. Standard costs are benchmarks used to measure performance against targets for inputs like direct materials, direct labor, and manufacturing overhead. Variances from standards are identified and reported. 2. Managers from different departments work together to set reasonable and attainable standards for direct materials, direct labor hours and rates, and variable overhead rates and activities. Variance analysis is used to identify issues. 3. Material variances are calculated based on the actual quantity purchased and price paid versus the standard quantity needed and price. The price variance is calculated on total quantity purchased while the quantity variance is only on amount used in production.

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Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 11th Edition Chapter 10
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs and the Balanced Scorecard Chapter Ten
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs Standards are benchmarks or “norms” for measuring performance. Two types of standards are commonly used. Quantity standards specify how much of an input should be used to make a product or provide a service. Cost (price) standards specify how much should be paid for each unit of the input.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs Direct Material Deviations from standard deemed significant are brought to the attention of management, a practice known as management by exception. Type of Product Cost Amount Direct Labor Manufacturing Overhead Standard
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis Cycle Prepare standard cost performance report Analyze variances Begin Identify questions Receive explanations Take corrective actions Conduct next period’s operations Exh. 10-1
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Accountants, engineers, purchasing agents, and production managers combine efforts to set standards that encourage efficient future production. Setting Standard Costs
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Standard Costs Should we use ideal standards that require employees to work at 100 percent peak efficiency? Engineer Managerial Accountant I recommend using practical standards that are currently attainable with reasonable and efficient effort.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Direct Material Standards Price Standards Summarized in a Bill of Materials. Final, delivered cost of materials, net of discounts. Quantity Standards
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Standards In recent years, TQM advocates have sought to eliminate all defects and waste, rather than continually build them into standards. As a result allowances for waste and spoilage that are built into standards should be reduced over time.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Direct Labor Standards Rate Standards Often a single rate is used that reflects the mix of wages earned. Time Standards Use time and motion studies for each labor operation.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Variable Overhead Standards Rate Standards The rate is the variable portion of the predetermined overhead rate. Activity Standards The activity is the base used to calculate the predetermined overhead.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Cost Card – Variable Production Cost A standard cost card for one unit of product might look like this: A A x B Standard Standard Standard Quantity Price Cost Inputs or Hours or Rate per Unit Direct materials 3.0 lbs. 4.00 $ per lb. 12.00 $ Direct labor 2.5 hours 14.00 per hour 35.00 Variable mfg. overhead 2.5 hours 3.00 per hour 7.50 Total standard unit cost 54.50 $ B
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Are standards the same as budgets? A budget is set for total costs. Standards vs. Budgets A standard is a per unit cost. Standards are often used when preparing budgets.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price and Quantity Standards Price and and quantity standards are determined separately for two reasons:  The purchasing manager is responsible for raw material purchase prices and the production manager is responsible for the quantity of raw material used.  The buying and using activities occur at different times. Raw material purchases may be held in inventory for a period of time before being used in production.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis Variance Analysis Price Variance Difference between actual price and standard price Quantity Variance Difference between actual quantity and standard quantity
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis Price Variance Quantity Variance Materials price variance Labor rate variance VOH spending variance Materials quantity variance Labor efficiency variance VOH efficiency variance A General Model for Variance Analysis
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Actual quantity is the amount of direct materials, direct labor, and variable manufacturing overhead actually used.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Standard quantity is the standard quantity allowed for the actual output for the period.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Actual price is the amount actually paid for the for the input used.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis Standard price is the amount that should have been paid for the input used. Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis (AQ × AP) – (AQ × SP) (AQ × SP) – (SQ × SP) AQ = Actual Quantity SP = Standard Price AP = Actual Price SQ = Standard Quantity Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct material standard for the fiberfill in its mountain parka. 0.1 kg. of fiberfill per parka at $5.00 per kg. Last month 210 kgs of fiberfill were purchased and used to make 2,000 parkas. The material cost a total of $1,029. Material Variances Example
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price Material Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price $1,029  210 kgs = $4.90 per kg Material Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price 0.1 kg per parka  2,000 parkas = 200 kgs Material Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Material Variances: Using the Factored Equations Materials price variance MPV = AQ (AP - SP) = 210 kgs ($4.90/kg - $5.00/kg) = 210 kgs (-$0.10/kg) = $21 F Materials quantity variance MQV = SP (AQ - SQ) = $5.00/kg (210 kgs-(0.1 kg/parka 2,000 parkas)) = $5.00/kg (210 kgs - 200 kgs) = $5.00/kg (10 kgs) = $50 U
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Isolation of Material Variances I need the price variance sooner so that I can better identify purchasing problems. You accountants just don’t understand the problems that purchasing managers have. I’ll start computing the price variance when material is purchased rather than when it’s used.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Material Variances Hanson purchased and used 1,700 pounds. How are the variances computed if the amount purchased differs from the amount used? The price variance is computed on the entire quantity purchased. The quantity variance is computed only on the quantity used.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Material Variances Materials Price Variance Materials Quantity Variance Production Manager Purchasing Manager The standard price is used to compute the quantity variance so that the production manager is not held responsible for the purchasing manager’s performance.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin I am not responsible for this unfavorable material quantity variance. You purchased cheap material, so my people had to use more of it. Your poor scheduling sometimes requires me to rush order material at a higher price, causing unfavorable price variances. Responsibility for Material Variances
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following direct material standard to manufacture one Zippy: 1.5 pounds per Zippy at $4.00 per pound Last week 1,700 pounds of material were purchased and used to make 1,000 Zippies. The material cost a total of $6,630. Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Quick Check  Zippy Hanson’s material price variance (MPV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s material price variance (MPV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. MPV = AQ(AP - SP) MPV = 1,700 lbs. × ($3.90 - 4.00) MPV = $170 Favorable Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Quick Check  Hanson’s material quantity variance (MQV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s material quantity variance (MQV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. MQV = SP(AQ - SQ) MQV = $4.00(1,700 lbs - 1,500 lbs) MQV = $800 unfavorable Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 1,700 lbs. 1,700 lbs. 1,500 lbs. × × × $3.90 per lb. $4.00 per lb. $4.00 per lb. = $6,630 = $ 6,800 = $6,000 Price variance $170 favorable Quantity variance $800 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following material standard to manufacture one Zippy: 1.5 pounds per Zippy at $4.00 per pound Last week 2,800 pounds of material were purchased at a total cost of $10,920, and 1,700 pounds were used to make 1,000 Zippies. Zippy Quick Check  Continued
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Quantity Actual Quantity Purchased Purchased × × Actual Price Standard Price 2,800 lbs. 2,800 lbs. × × $3.90 per lb. $4.00 per lb. = $10,920 = $11,200 Price variance $280 favorable Price variance increases because quantity purchased increases. Zippy Quick Check  Continued
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Quantity Used Standard Quantity × × Standard Price Standard Price 1,700 lbs. 1,500 lbs. × × $4.00 per lb. $4.00 per lb. = $6,800 = $6,000 Quantity variance $800 unfavorable Quantity variance is unchanged because actual and standard quantities are unchanged. Zippy Quick Check  Continued
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct labor standard for its mountain parka. 1.2 standard hours per parka at $10.00 per hour Last month employees actually worked 2,500 hours at a total labor cost of $26,250 to make 2,000 parkas. Labor Variances Example
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Labor Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate $26,250  2,500 hours = $10.50 per hour Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 1.2 hours per parka  2,000 parkas = 2,400 hours Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances: Using the Factored Equations Labor rate variance LRV = AH (AR - SR) = 2,500 hours ($10.50 per hour – $10.00 per hour) = 2,500 hours ($0.50 per hour) = $1,250 unfavorable Labor efficiency variance LEV = SR (AH - SH) = $10.00 per hour (2,500 hours – 2,400 hours) = $10.00 per hour (100 hours) = $1,000 unfavorable
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Labor Variances Production Manager Production managers are usually held accountable for labor variances because they can influence the: Mix of skill levels assigned to work tasks. Level of employee motivation. Quality of production supervision. Quality of training provided to employees.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Labor Variances I am not responsible for the unfavorable labor efficiency variance! You purchased cheap material, so it took more time to process it. I think it took more time to process the materials because the Maintenance Department has poorly maintained your equipment.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following direct labor standard to manufacture one Zippy: 1.5 standard hours per Zippy at $12.00 per direct labor hour Last week 1,550 direct labor hours were worked at a total labor cost of $18,910 to make 1,000 Zippies. Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor rate variance (LRV) for the week was: a. $310 unfavorable. b. $310 favorable. c. $300 unfavorable. d. $300 favorable. Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor rate variance (LRV) for the week was: a. $310 unfavorable. b. $310 favorable. c. $300 unfavorable. d. $300 favorable. Quick Check  LRV = AH(AR - SR) LRV = 1,550 hrs($12.20 - $12.00) LRV = $310 unfavorable Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor efficiency variance (LEV) for the week was: a. $590 unfavorable. b. $590 favorable. c. $600 unfavorable. d. $600 favorable. Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor efficiency variance (LEV) for the week was: a. $590 unfavorable. b. $590 favorable. c. $600 unfavorable. d. $600 favorable. Quick Check  LEV = SR(AH - SH) LEV = $12.00(1,550 hrs - 1,500 hrs) LEV = $600 unfavorable Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Rate variance $310 unfavorable Efficiency variance $600 unfavorable 1,550 hours 1,550 hours 1,500 hours × × × $12.20 per hour $12.00 per hour $12.00 per hour = $18,910 = $18,600 = $18,000 Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct variable manufacturing overhead labor standard for its mountain parka. 1.2 standard hours per parka at $4.00 per hour Last month employees actually worked 2,500 hours to make 2,000 parkas. Actual variable manufacturing overhead for the month was $10,500. Variable Manufacturing Overhead Variances Example
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Variable Manufacturing Overhead Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable $10,500  2,500 hours = $4.20 per hour Variable Manufacturing Overhead Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable 1.2 hours per parka  2,000 parkas = 2,400 hours Variable Manufacturing Overhead Variances Summary
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variable Manufacturing Overhead Variances: Using Factored Equations Variable manufacturing overhead spending variance VMSV = AH (AR - SR) = 2,500 hours ($4.20 per hour – $4.00 per hour) = 2,500 hours ($0.20 per hour) = $500 unfavorable Variable manufacturing overhead efficiency variance VMEV = SR (AH - SH) = $4.00 per hour (2,500 hours – 2,400 hours) = $4.00 per hour (100 hours) = $400 unfavorable
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following variable manufacturing overhead standard to manufacture one Zippy: 1.5 standard hours per Zippy at $3.00 per direct labor hour Last week 1,550 hours were worked to make 1,000 Zippies, and $5,115 was spent for variable manufacturing overhead. Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s spending variance (VOSV) for variable manufacturing overhead for the week was: a. $465 unfavorable. b. $400 favorable. c. $335 unfavorable. d. $300 favorable. Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s spending variance (VOSV) for variable manufacturing overhead for the week was: a. $465 unfavorable. b. $400 favorable. c. $335 unfavorable. d. $300 favorable. Quick Check  VOSV = AH(AR - SR) VOSV = 1,550 hrs($3.30 - $3.00) VOSV = $465 unfavorable Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s efficiency variance (VOEV) for variable manufacturing overhead for the week was: a. $435 unfavorable. b. $435 favorable. c. $150 unfavorable. d. $150 favorable. Quick Check  Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s efficiency variance (VOEV) for variable manufacturing overhead for the week was: a. $435 unfavorable. b. $435 favorable. c. $150 unfavorable. d. $150 favorable. Quick Check  VOEV = SR(AH - SH) VOEV = $3.00(1,550 hrs - 1,500 hrs) VOEV = $150 unfavorable 1,000 units × 1.5 hrs per unit Zippy
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Spending variance $465 unfavorable Efficiency variance $150 unfavorable 1,550 hours 1,550 hours 1,500 hours × × × $3.30 per hour $3.00 per hour $3.00 per hour = $5,115 = $4,650 = $4,500 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Zippy Quick Check 
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis and Management by Exception How do I know which variances to investigate? Larger variances, in dollar amount or as a percentage of the standard, are investigated first.
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A Statistical Control Chart 1 2 3 4 5 6 7 8 9 Variance Measurements Favorable Limit Unfavorable Limit • • • • • • • • • Warning signals for investigation Desired Value Exh. 10-9
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Advantages of Standard Costs Management by exception Advantages Promotes economy and efficiency Simplified bookkeeping Enhances responsibility accounting
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Potential Problems Emphasis on negative may impact morale. Emphasizing standards may exclude other important objectives. Favorable variances may be misinterpreted. Continuous improvement may be more important than meeting standards. Standard cost reports may not be timely. Invalid assumptions about the relationship between labor cost and output. Potential Problems with Standard Costs
Copyright © 2006, The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin End of Chapter 10

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GNChap010.ppt

  • 1.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 11th Edition Chapter 10
  • 2.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs and the Balanced Scorecard Chapter Ten
  • 3.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs Standards are benchmarks or “norms” for measuring performance. Two types of standards are commonly used. Quantity standards specify how much of an input should be used to make a product or provide a service. Cost (price) standards specify how much should be paid for each unit of the input.
  • 4.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Costs Direct Material Deviations from standard deemed significant are brought to the attention of management, a practice known as management by exception. Type of Product Cost Amount Direct Labor Manufacturing Overhead Standard
  • 5.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis Cycle Prepare standard cost performance report Analyze variances Begin Identify questions Receive explanations Take corrective actions Conduct next period’s operations Exh. 10-1
  • 6.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Accountants, engineers, purchasing agents, and production managers combine efforts to set standards that encourage efficient future production. Setting Standard Costs
  • 7.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Standard Costs Should we use ideal standards that require employees to work at 100 percent peak efficiency? Engineer Managerial Accountant I recommend using practical standards that are currently attainable with reasonable and efficient effort.
  • 8.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Direct Material Standards Price Standards Summarized in a Bill of Materials. Final, delivered cost of materials, net of discounts. Quantity Standards
  • 9.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Standards In recent years, TQM advocates have sought to eliminate all defects and waste, rather than continually build them into standards. As a result allowances for waste and spoilage that are built into standards should be reduced over time.
  • 10.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Direct Labor Standards Rate Standards Often a single rate is used that reflects the mix of wages earned. Time Standards Use time and motion studies for each labor operation.
  • 11.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Setting Variable Overhead Standards Rate Standards The rate is the variable portion of the predetermined overhead rate. Activity Standards The activity is the base used to calculate the predetermined overhead.
  • 12.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Standard Cost Card – Variable Production Cost A standard cost card for one unit of product might look like this: A A x B Standard Standard Standard Quantity Price Cost Inputs or Hours or Rate per Unit Direct materials 3.0 lbs. 4.00 $ per lb. 12.00 $ Direct labor 2.5 hours 14.00 per hour 35.00 Variable mfg. overhead 2.5 hours 3.00 per hour 7.50 Total standard unit cost 54.50 $ B
  • 13.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Are standards the same as budgets? A budget is set for total costs. Standards vs. Budgets A standard is a per unit cost. Standards are often used when preparing budgets.
  • 14.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price and Quantity Standards Price and and quantity standards are determined separately for two reasons:  The purchasing manager is responsible for raw material purchase prices and the production manager is responsible for the quantity of raw material used.  The buying and using activities occur at different times. Raw material purchases may be held in inventory for a period of time before being used in production.
  • 15.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis Variance Analysis Price Variance Difference between actual price and standard price Quantity Variance Difference between actual quantity and standard quantity
  • 16.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis Price Variance Quantity Variance Materials price variance Labor rate variance VOH spending variance Materials quantity variance Labor efficiency variance VOH efficiency variance A General Model for Variance Analysis
  • 17.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis
  • 18.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Actual quantity is the amount of direct materials, direct labor, and variable manufacturing overhead actually used.
  • 19.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Standard quantity is the standard quantity allowed for the actual output for the period.
  • 20.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price A General Model for Variance Analysis Actual price is the amount actually paid for the for the input used.
  • 21.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis Standard price is the amount that should have been paid for the input used. Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price
  • 22.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A General Model for Variance Analysis (AQ × AP) – (AQ × SP) (AQ × SP) – (SQ × SP) AQ = Actual Quantity SP = Standard Price AP = Actual Price SQ = Standard Quantity Price Variance Quantity Variance Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price
  • 23.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct material standard for the fiberfill in its mountain parka. 0.1 kg. of fiberfill per parka at $5.00 per kg. Last month 210 kgs of fiberfill were purchased and used to make 2,000 parkas. The material cost a total of $1,029. Material Variances Example
  • 24.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price Material Variances Summary
  • 25.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price $1,029  210 kgs = $4.90 per kg Material Variances Summary
  • 26.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 210 kgs. 210 kgs. 200 kgs. × × × $4.90 per kg. $5.00 per kg. $5.00 per kg. = $1,029 = $1,050 = $1,000 Price variance $21 favorable Quantity variance $50 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price 0.1 kg per parka  2,000 parkas = 200 kgs Material Variances Summary
  • 27.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Material Variances: Using the Factored Equations Materials price variance MPV = AQ (AP - SP) = 210 kgs ($4.90/kg - $5.00/kg) = 210 kgs (-$0.10/kg) = $21 F Materials quantity variance MQV = SP (AQ - SQ) = $5.00/kg (210 kgs-(0.1 kg/parka 2,000 parkas)) = $5.00/kg (210 kgs - 200 kgs) = $5.00/kg (10 kgs) = $50 U
  • 28.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Isolation of Material Variances I need the price variance sooner so that I can better identify purchasing problems. You accountants just don’t understand the problems that purchasing managers have. I’ll start computing the price variance when material is purchased rather than when it’s used.
  • 29.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Material Variances Hanson purchased and used 1,700 pounds. How are the variances computed if the amount purchased differs from the amount used? The price variance is computed on the entire quantity purchased. The quantity variance is computed only on the quantity used.
  • 30.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Material Variances Materials Price Variance Materials Quantity Variance Production Manager Purchasing Manager The standard price is used to compute the quantity variance so that the production manager is not held responsible for the purchasing manager’s performance.
  • 31.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin I am not responsible for this unfavorable material quantity variance. You purchased cheap material, so my people had to use more of it. Your poor scheduling sometimes requires me to rush order material at a higher price, causing unfavorable price variances. Responsibility for Material Variances
  • 32.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following direct material standard to manufacture one Zippy: 1.5 pounds per Zippy at $4.00 per pound Last week 1,700 pounds of material were purchased and used to make 1,000 Zippies. The material cost a total of $6,630. Zippy Quick Check 
  • 33.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Quick Check  Zippy Hanson’s material price variance (MPV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable.
  • 34.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s material price variance (MPV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. MPV = AQ(AP - SP) MPV = 1,700 lbs. × ($3.90 - 4.00) MPV = $170 Favorable Quick Check  Zippy
  • 35.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Quick Check  Hanson’s material quantity variance (MQV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. Zippy
  • 36.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s material quantity variance (MQV) for the week was: a. $170 unfavorable. b. $170 favorable. c. $800 unfavorable. d. $800 favorable. MQV = SP(AQ - SQ) MQV = $4.00(1,700 lbs - 1,500 lbs) MQV = $800 unfavorable Quick Check  Zippy
  • 37.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 1,700 lbs. 1,700 lbs. 1,500 lbs. × × × $3.90 per lb. $4.00 per lb. $4.00 per lb. = $6,630 = $ 6,800 = $6,000 Price variance $170 favorable Quantity variance $800 unfavorable Actual Quantity Actual Quantity Standard Quantity × × × Actual Price Standard Price Standard Price Zippy Quick Check 
  • 38.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following material standard to manufacture one Zippy: 1.5 pounds per Zippy at $4.00 per pound Last week 2,800 pounds of material were purchased at a total cost of $10,920, and 1,700 pounds were used to make 1,000 Zippies. Zippy Quick Check  Continued
  • 39.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Quantity Actual Quantity Purchased Purchased × × Actual Price Standard Price 2,800 lbs. 2,800 lbs. × × $3.90 per lb. $4.00 per lb. = $10,920 = $11,200 Price variance $280 favorable Price variance increases because quantity purchased increases. Zippy Quick Check  Continued
  • 40.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Quantity Used Standard Quantity × × Standard Price Standard Price 1,700 lbs. 1,500 lbs. × × $4.00 per lb. $4.00 per lb. = $6,800 = $6,000 Quantity variance $800 unfavorable Quantity variance is unchanged because actual and standard quantities are unchanged. Zippy Quick Check  Continued
  • 41.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct labor standard for its mountain parka. 1.2 standard hours per parka at $10.00 per hour Last month employees actually worked 2,500 hours at a total labor cost of $26,250 to make 2,000 parkas. Labor Variances Example
  • 42.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Labor Variances Summary
  • 43.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate $26,250  2,500 hours = $10.50 per hour Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable
  • 44.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances Summary 2,500 hours 2,500 hours 2,400 hours × × × $10.50 per hour $10.00 per hour. $10.00 per hour = $26,250 = $25,000 = $24,000 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 1.2 hours per parka  2,000 parkas = 2,400 hours Rate variance $1,250 unfavorable Efficiency variance $1,000 unfavorable
  • 45.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Labor Variances: Using the Factored Equations Labor rate variance LRV = AH (AR - SR) = 2,500 hours ($10.50 per hour – $10.00 per hour) = 2,500 hours ($0.50 per hour) = $1,250 unfavorable Labor efficiency variance LEV = SR (AH - SH) = $10.00 per hour (2,500 hours – 2,400 hours) = $10.00 per hour (100 hours) = $1,000 unfavorable
  • 46.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Labor Variances Production Manager Production managers are usually held accountable for labor variances because they can influence the: Mix of skill levels assigned to work tasks. Level of employee motivation. Quality of production supervision. Quality of training provided to employees.
  • 47.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsibility for Labor Variances I am not responsible for the unfavorable labor efficiency variance! You purchased cheap material, so it took more time to process it. I think it took more time to process the materials because the Maintenance Department has poorly maintained your equipment.
  • 48.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following direct labor standard to manufacture one Zippy: 1.5 standard hours per Zippy at $12.00 per direct labor hour Last week 1,550 direct labor hours were worked at a total labor cost of $18,910 to make 1,000 Zippies. Zippy Quick Check 
  • 49.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor rate variance (LRV) for the week was: a. $310 unfavorable. b. $310 favorable. c. $300 unfavorable. d. $300 favorable. Quick Check  Zippy
  • 50.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor rate variance (LRV) for the week was: a. $310 unfavorable. b. $310 favorable. c. $300 unfavorable. d. $300 favorable. Quick Check  LRV = AH(AR - SR) LRV = 1,550 hrs($12.20 - $12.00) LRV = $310 unfavorable Zippy
  • 51.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor efficiency variance (LEV) for the week was: a. $590 unfavorable. b. $590 favorable. c. $600 unfavorable. d. $600 favorable. Quick Check  Zippy
  • 52.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s labor efficiency variance (LEV) for the week was: a. $590 unfavorable. b. $590 favorable. c. $600 unfavorable. d. $600 favorable. Quick Check  LEV = SR(AH - SH) LEV = $12.00(1,550 hrs - 1,500 hrs) LEV = $600 unfavorable Zippy
  • 53.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Rate variance $310 unfavorable Efficiency variance $600 unfavorable 1,550 hours 1,550 hours 1,500 hours × × × $12.20 per hour $12.00 per hour $12.00 per hour = $18,910 = $18,600 = $18,000 Zippy Quick Check 
  • 54.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Glacier Peak Outfitters has the following direct variable manufacturing overhead labor standard for its mountain parka. 1.2 standard hours per parka at $4.00 per hour Last month employees actually worked 2,500 hours to make 2,000 parkas. Actual variable manufacturing overhead for the month was $10,500. Variable Manufacturing Overhead Variances Example
  • 55.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Variable Manufacturing Overhead Variances Summary
  • 56.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable $10,500  2,500 hours = $4.20 per hour Variable Manufacturing Overhead Variances Summary
  • 57.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate 2,500 hours 2,500 hours 2,400 hours × × × $4.20 per hour $4.00 per hour $4.00 per hour = $10,500 = $10,000 = $9,600 Spending variance $500 unfavorable Efficiency variance $400 unfavorable 1.2 hours per parka  2,000 parkas = 2,400 hours Variable Manufacturing Overhead Variances Summary
  • 58.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variable Manufacturing Overhead Variances: Using Factored Equations Variable manufacturing overhead spending variance VMSV = AH (AR - SR) = 2,500 hours ($4.20 per hour – $4.00 per hour) = 2,500 hours ($0.20 per hour) = $500 unfavorable Variable manufacturing overhead efficiency variance VMEV = SR (AH - SH) = $4.00 per hour (2,500 hours – 2,400 hours) = $4.00 per hour (100 hours) = $400 unfavorable
  • 59.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson Inc. has the following variable manufacturing overhead standard to manufacture one Zippy: 1.5 standard hours per Zippy at $3.00 per direct labor hour Last week 1,550 hours were worked to make 1,000 Zippies, and $5,115 was spent for variable manufacturing overhead. Zippy Quick Check 
  • 60.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s spending variance (VOSV) for variable manufacturing overhead for the week was: a. $465 unfavorable. b. $400 favorable. c. $335 unfavorable. d. $300 favorable. Quick Check  Zippy
  • 61.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s spending variance (VOSV) for variable manufacturing overhead for the week was: a. $465 unfavorable. b. $400 favorable. c. $335 unfavorable. d. $300 favorable. Quick Check  VOSV = AH(AR - SR) VOSV = 1,550 hrs($3.30 - $3.00) VOSV = $465 unfavorable Zippy
  • 62.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s efficiency variance (VOEV) for variable manufacturing overhead for the week was: a. $435 unfavorable. b. $435 favorable. c. $150 unfavorable. d. $150 favorable. Quick Check  Zippy
  • 63.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Hanson’s efficiency variance (VOEV) for variable manufacturing overhead for the week was: a. $435 unfavorable. b. $435 favorable. c. $150 unfavorable. d. $150 favorable. Quick Check  VOEV = SR(AH - SH) VOEV = $3.00(1,550 hrs - 1,500 hrs) VOEV = $150 unfavorable 1,000 units × 1.5 hrs per unit Zippy
  • 64.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Spending variance $465 unfavorable Efficiency variance $150 unfavorable 1,550 hours 1,550 hours 1,500 hours × × × $3.30 per hour $3.00 per hour $3.00 per hour = $5,115 = $4,650 = $4,500 Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Zippy Quick Check 
  • 65.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Variance Analysis and Management by Exception How do I know which variances to investigate? Larger variances, in dollar amount or as a percentage of the standard, are investigated first.
  • 66.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin A Statistical Control Chart 1 2 3 4 5 6 7 8 9 Variance Measurements Favorable Limit Unfavorable Limit • • • • • • • • • Warning signals for investigation Desired Value Exh. 10-9
  • 67.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Advantages of Standard Costs Management by exception Advantages Promotes economy and efficiency Simplified bookkeeping Enhances responsibility accounting
  • 68.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Potential Problems Emphasis on negative may impact morale. Emphasizing standards may exclude other important objectives. Favorable variances may be misinterpreted. Continuous improvement may be more important than meeting standards. Standard cost reports may not be timely. Invalid assumptions about the relationship between labor cost and output. Potential Problems with Standard Costs
  • 69.
    Copyright © 2006,The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin End of Chapter 10