BUS 254 Chapter Notes - Chapter 12: Standard Cost Accounting, Balanced Scorecard, Cost Accounting

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: All

Document Summary

Chapter 12 standard costs and balanced scorecard. Both are predetermined costs and contribute to management planning and control. Difference in way the terms are expressed: standard is unit amount, budget is total amount, a standard is the budgeted cost per unit of product, standard concerned with each individual cost component that makes up the entire budget. Companies set standards at one of two levels: ideal or normal. Normal standards represent efficient levels of performance that are attainable under expected operating conditions: most companies use, are rigorous but attainable, allow for rest periods, machine breakdowns, and other normal contingencies in the production process. We will assume for the remainder of this chapter that standard costs are set at a normal level. To establish the standard costs of producing a product, need to establish standards for each manufacturing costs element (dm, dl, moh) Standard is determined from the standard price to be paid and the standard quantity to be used.