Ch 5 · Standard Costing & Variance Analysis

5 concept points · 6 formulas · 4 exam-critical points.

📘 Core concepts

• 1Standard cost: predetermined cost based on technical estimates.
• 2Variance: difference between actual and standard.
• 3Material variances: Cost (Price + Usage); Usage = Mix + Yield.
• 4Labour variances: Cost (Rate + Efficiency); Efficiency = Mix + Yield + Idle Time.
• 5Overhead variances: Variable (Expenditure + Efficiency); Fixed (Expenditure + Volume = Capacity + Efficiency + Calendar).