Standard cost per unit 3 / 3

Standard Cost Card

A standard cost card shows full details of the standard cost of each product.

standard cost card - product x
$$
direct material x kgs @ $xx
x lts @ $xx
--
x
direct labour x hrs @ $xx
x hrs @ $xx
--
x
--
standard direct costx
variable production overheadsx
--
standard variable cost of
production
x (marginal
costing)
fixed production overheadx
--
standard full production cost

x (absorption
costing)
administration & marketing
overhead
x
--
standard cost of salex
standard profitx
--
standard sales pricex
==

A variance is the difference between a planned, budgeted, or standard cost and the actual cost incurred.

The same comparisons may be made for revenues.

The process by which the total difference between standard and actual results is analysed is known as variance analysis.

When actual results are better than expected results, we have a favourable variance (F).

If, on the other hand, actual results are worse than expected results, we have an adverse variance (A).

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