Calculating Standard Cost Variances Step-by-Step with Mike Werner, a Basic Example. Standard Costing

Calculating Standard Cost Variances Step-by-Step
A Basic Example
Calculating standard cost variances can be a challenge for accounting students and business professional alike.
In this video, we use a tiny company that is easy to visualize. And, in a step-by-step fashion we calculate the 8 most popular standard cost variances. We calculate the Direct Material Price and Quantity (Usage, Efficiency) Variances, Direct Labor Rate (Price) and Efficiency Variances, Variable Manufacturing Overhead Spending (Price) and Efficiency Variances and Fixed Manufacturing Overhead Spending (Budget) and Production Volume Variances.
We also calculate the total standard cost (flexible budget) variance for each of the cost classifications.
As we go through the calculations, we include some coverage of what the variances mean to the company and its managers.
Please visit the Channel to see other step-by-step videos covering a range of accounting topics.
Thank you for tuning in!
Mike Werner

[@MikeWMiami]

Wow! Finally a standard costing presentation I can follow! Step by step and very understandable from intro to closing comments. Thank you!

[@accountingstepbystep2229]

I'm glad it was helpful! Thanks for watching!

[@MikeWMiami]

@@accountingstepbystep2229 Thanks!

[@markwarren8319]

Well done and easy to follow and understand. Thanks for the help.

[@accountingstepbystep2229]

Thank you so much, Mark! Hope it was helpful! Keep in touch! Best, Mike

[@MUSTAFAMUSTAFACMA]

Thanks for the refreshment.

[@accountingstepbystep2229]

Dear Mustafa, You are most welcome. Thank you for your comment and I hope the video was useful. Have a great week! Please let me know if you view any of my other videos. Please keep in touch! Best regards, Mike

[@finnburke7189]

Hi Mike, great job with these videos. Can I ask have you uploaded a video that covers; decision making, spefically: distinguishing between relevant and irrelavnt costs in decisions and establishing relevant cash flows for decision making and applying these principles? Thanks in advance

[@accountingstepbystep2229]

I'm so sorry I did not respond earlier to your comment. I apologized for not seeing it sooner. I have not created a relevant cost video yet but hope to do so soon. In the meantime, I wrote an introduction to management accounting textbook, Management Accounting - A User Perspective and Accounting - A User Perspective and each of these books includes an easy to read and understand presentation on this area. The books are out of print but still available on eBxy and Amaxxone for just a couple of dollars. Also your local library may have introductory management accounting books that would be helpful. Perhaps look for a management accounting text by Ray Garrison (moderately in depth) or Charles Horngren (more in depth), or a great book, easy to understand would be a management accounting book by Paul Kimmel. Any edition of any of these books would be fine. A more advance presentation can be found in any edition of Cost Accounting by Charles Horngren. You can find old editions of any of these books for just a couple of dollars on eBxy or Amaxxone. Thank you again for your comment and very best regards, Mike