VARIANCE ANALYSIS NOTES

  Direct material cost variance: 1) Material cost variance = (actual price x actual quantity) – (standard price x standard quantity) 2) Material price variance = (actual price – standard price) actual quantity 3) Material usage variance = (actual quantity Read More …

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STANDARD COSTING NOTES

Introduction Standard costing – is a technique which establishes predetermined estimates of the cost of products and then compares these predetermined costs with actual costs as they are incurred. The predetermined costs are known as standard costs and the difference Read More …

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MARGINAL AND ABSORPTION COSTING

MARGINAL COSTING/DIRECT COSTING/VARIABLE COSTING This is a costing technique in which only variable manufacturing costs are considered and used in valuing inventories and also in determining the cost of goods sold i.e. only variable production cost are considered as products Read More …

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SERVICE COSTING

Introduction This is a method of costing employed to ascertain the cost of providing a service e.g. road transport undertakings, electricity supply, canteen services, airways services etc. In general, the unit of cost in service costing may be predetermined as Read More …

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PROCESS COSTING

Introduction Process costing is a form of costing where production follows a series of sequence or processes. In process costing the output of any given process becomes the input of the next process. It’s used in such industries as oil Read More …

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CONTRACT COSTING

Introduction Contract costing is a costing technique which is applied in accumulating the cost of large scale jobs. It is also called terminal costing. Characteristics of contract costing There is a high proportion of direct cost since almost all the Read More …

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