Page 103 - 5.2 i. Manac Costing ITC Summarised Notes
P. 103
STANDARD COSTING
The Standard Cost Card
• Drawing up a standard cost card will enable you to have
a clear understanding of the costing method being used
– Absorption vs Variable Costing.
• It will also enable you to understand the resources
being used in terms of standard quantities and costs.
• Variances differ based on the method in use
(Absorption vs Variable). Differences occur in sales and
fixed overhead related variances. All other variances
are similar irrespective of the costing method used.
• The two basic variances for an absorption costing system are
the fixed overhead expenditure and the fixed overhead
volume variance. The latter can then be analysed further into
the fixed overhead efficiency and the fixed overhead
capacity variances.
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