Abstract
This chapter considers standard costing technique and looks at how the analysis of divergences from the standard can be used to identify problems requiring attention. It provides illustrations and instructions on how to calculate for standard cost and shows various variances such as material total, price, and usage variances; sales volume and price variances; and efficiency variances. The chapter also shows the function of standard costing as an accounting control device and explains that variances are indicators of problems subject to rectification.
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