The presentation explains that how Standard costing works in a organization with a illustration problem with that clear the conclusion of Standard costing

1. Topic : problem on standard costing
Presenting by,
Mahadeva prasad.m
1st MFM,
DOS in commerce,
Manasa gangotri ,
mysore.

2. The technique of using standard cost for purposes of
cost control is known as standard costing
According to London institute of cost and work
accountants as “an estimate cost prepared in advance
of production

3. Standard costing is a technique which helps
management to control costs and business
operations it aims at eliminating wastes
incereasing efficiciency in performance
trough setting up standards or formulating
cost plans

4. The technique of using standard cost for
purposes of cost control is known as standard
costing
According to london institute of cost and work
accountants as “an estimate cost prepared in
advance of production

5. 1. The determination of standard cost
2. The recording of actual cost
3. The comparison between standard cost and
actual cost
4. The finding out of variance
5. The reporting of variance so as to find out
inefficiency and take necessary corrective
measures

6. From the following into calculate Labour rate
variance , Labour efficiency variance and
Labour cost variance.
 Standard hours per unit 3 hours
 Standard wage rate 3 per hour
 Actual units produced 250 units
 Actual wages rate 3.50p per hour
 Hours worked 800 hour

7. Actual units produced × standard wage rate
250 units × 3 hrs
standard time = 750 hours

8. (Std time × Std rate) – (Actual time × Actual rate)
(750hrs × 3per hr) – (800hrs × 3.50p per hr)
2,250 – 2,800
Labour cost variance = 550

9. Actual time(Standard rate – Actual rate)
800(3 – 3.50p)
800(0.50p)
Labour rate variance = 400

10. Std rate per hr(Actual time – std time)
3(800 – 750)
3(50)
Labour turnover variance = 150

11. LCV = LRV + LTV
550 = 400+150
550 = 550

12. Cost and Management accounting
-from ICSI (The institute of
company secretaries of India)

13. Thank you