standard cost and balanced scorecard
actual overhead =
variable + fixed overhead
actual cost =
direct materials + direct labor + variable overhead + fixed overhead
Labor price variance (LPV) =
(AH * AR) - (AH * SR)
total labor variance (TLV) =
(AH * AR) - (SH * SR)
Labor quantity variance (LQV) =
(AH * SR) - (SH * SR)
total material variance (TMV) =
(AQ * AP) - (SQ * SP)
material quantity variance (MQV) =
(AQ * SP) - (SQ * SP)
Total labor variance (shortcut method) =
Labor price variance - labor quantity variance (LPV-LQV)
TMV (short cut method) =
MPV + MQV
Materials Price Variance (MPV) =
[Actual Quantity x Actual Price] - [Actual Quantity * Standard price] (AQ)(AP) - (AQ)(SP)
total variance =
actual cost - standard cost
favorable variance =
actual cost < standard cost
unfavorable variance =
actual cost > standard cost
standard predetermined overhead rate =
budgeted overhead / expected standard activity index
Total overhead variance
is the difference between actual overhead costs and overhead costs applied to work done.
standard direct material cost =
standard direct material price per pound * standard direct materials quantity per unit
standard quantity cost =
standard quantity * standard price
total overhead variance =
actual overhead - overhead applied
standard direct labor cost =
Direct labor price standard * direct labor quantity standard
standard manufacturing overhead rate =
overhead rate per direct hour * required direct labor hours
overhead applied =
predetermined overhead rate * SH note: SH = hrs * units produced
direct materials price standard
the cost per unit of direct materials that should be incurred; includes: receiving, storing, and handling costs
variances are?
the differences between total and actual cost and total standard cost
direct materials quantity standard
the quantity or direct materials that should be used per unit of finished goods
direct labor price standard or direct labor rate standard
the rate per hour that should be incurred for the direct labor
the total standard cost per unit is?
the sum of the standard cost of direct materials, direct labor, and manufacturing over head
direct labor quantity standard or direct labor efficiency
the time that should be required to make one unit of the product