Standards - part 1
Standard costing forms the foundation of variance analysis and performance management in organisations. This lesson builds understanding of how standards are set across different bases—from ideal to historic—and how to calculate and interpret variances to identify the root causes of cost deviations. You'll also explore the practical applications and limitations of standard costing in contemporary business environments.
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In this lesson
- 0:00 Introduction to Standard Costing and Variance Analysis
- 1:16 Understanding Standards in Business
- 2:21 Types of Standards Explained
- 4:02 Criticisms of Standard Costing
- 7:00 Setting Price and Usage Standards
- 10:41 Adjusting Standards for Inflation
About this lesson
Dive into the intricacies of standard costing and variance analysis in this enlightening 11-minute class. Explore the critical role standards play in decision-making, budgeting, and performance evaluation within an organisation, alongside a practical walkthrough on calculating variances and understanding their causes. Gain insights into the basis of different standards, from ideal to historic, and uncover the challenges and criticisms standard costing faces in modern business environments. This video offers a comprehensive guide for anyone looking to master the fundamentals of standard costing and improve their financial analysis skills.
Duration: 11m
- Standard costing fundamentals
- Variance analysis and calculation
- Types of standards (ideal, attainable, historic)
- Price and usage standards
- Inflation adjustment in standards
- Criticisms of standard costing
Transcript
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