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Accounting for Management
Explanations, Exercises, Problems and Calculators
Standard costing and variance analysis
Explain the terms ‘standard’ and ‘standard costing’.
Differentiate between standard and budget.
Compute and interpret direct materials, direct labor and variable and fixed manufacturing overhead variances.
Explain the purpose of preparing a variance performance report.
Number of pages:
Approximate time required:
3 – 3.5 hours
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Explanation of standards and standard costing
Difference between standards and budgets
Types of standards in standard costing
Direct materials price and quantity standards
Direct labor rate and quantity standards
Direct materials price variance
Direct materials quantity variance
Direct material mix variance
Direct material yield variance
Direct labor rate variance
Direct labor efficiency variance
Variable manufacturing overhead standards and Variances
Variable overhead spending variance
Variable overhead efficiency variance
Fixed overhead spending variance
Fixed overhead volume variance
Variance performance report