Standard costing

Primble

how do you wok out that standard cost if you are given budgeeted and actual costs?

ckane4

Just take your budgeted cost (say direct materials are £10,000) and divide by budgeted quantity (say 5,000kgs) - that gives a "standard cost" of £2 per kg. So then if you were to estimate how much it would cost you to produce 7,000kgs worth you would assume £14,000. That would be your "flexed budget/standard" amount which you would then compare against your actual cost for the same quantity when completing your variance analysis.

Londina

Primble wrote: »

how do you wok out that standard cost if you are given budgeeted and actual costs?

Primble, recheck Sandy's answer to your previous post, it clarifies a lot!
http://forums.aat.org.uk/showthread.php?t=22485

Primble

thankyou soooooooo much