Matakuliah
Tahun
: <<AKUNTANSI BIAYA II>>
: <<2009>>
STANDARD COSTING
Incorporating Standards
into the Accounting Records
Pertemuan 6 dan 7
LEARNING OBJECTIVE
Prepare general journal entries :
•To record elements of cost at standard amounts
•To record standard cost variances
•To account for complete products at standard costs.
•To dispose of standard cost variance
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Standard Cost Accounting for Materials
Purchase of Materials are recorded in one of three ways :
1. The price variance is recorded when materials are
received and placed in stores.
Example :
Standard unit purchase price … $ 7.5
Purchase ………………………. 10,000 pieces at $ 7.44
Requisitioned …………………... 9,500 pieces
SQ allow. for actual production .. 9.336 pieces
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Journal Entry for Method 1
• Journal entry to record the purchase and material
issued:
Materials ($7.5x10,000)
$ 75,000
Account Payable ($7.44x10,000)
74, 400
Material Purchase Price Variance($0.06x10,000) 600
. Work In Process ($7.5x9,336)
$ 70,020
Materials Quantity Variance($7.5x164)
1,230
Material($7.5x9,500)
71,250
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Standard Cost Accounting for Materials
2. Materials are recorded at actual cost when received :
the price variance is determined when the materials
requisitioned for production.
3. A Combination of Method 1 and 2
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Journal Entry for Method 2
• Journal entry when material are purchased :
Materials ($7.44x 10,000) ………. $ 74,400
Account Payable ………………
$ 74,400
• Journal entry when material issued :
Work In Process ($7.5x9,336)
$ 70,020
Materials Quantity Variance($7,5x164) 1,230
Materials ($7,44x9,500)
$ 70,680
Materials Price Usage Variance($0,06x9,500) 570
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Journal Entry for Method 3
Journal entry to record the purchase :
• Materials ($7.5x10,000)
$ 75,000
Account Payable ($7.44x10,000)
74, 400
Material Purchase Price Variance($0.06x10,000) 600
Journal entry when materials issued ( 2 journals)
. Work In Process ($7.5x9,336)
$ 70,020
Materials Quantity Variance($7.5x164)
1,230
Material($7.5x9,500)
71,250
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Journal Entry for Method 3
• Journal entry when transfers $ 570 from the purchase
price variance account to the price usage variance
account.
• Material Purchased Price Variance($0.06x9,500) 570
Materials Price Usage Variable
570
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Standard Cost Accounting for Labor
• Payroll is computed based on clock cards, job tickets,
and other information furnished to the payroll
department.
• Example :
• Actual Hours Worked …………………………..
1,632
• Actual Rate paid per hour ……………………… $ 12.50
• Standard hours allowed for actual production ..
1,504
• Standard rate per hour ………………………….. $ 12.00
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Standard Cost Accounting for Labor
•
•
•
•
•
•
•
Journal entry records the total actual DLH payroll :
Payroll ($ 12.50x1,632) …………… $ 20,400
Accrued Payroll ………………….
$ 20,400
Journal distributes payroll cost and recognize variances :
Work In Process ($12.00x1,504)…. $ 18,048
Labor Rate Variance ($0.50x1,632)
816
Labor Efficiency Variance ($12x128)
1,536
Payroll ……………………………
$ 20,400
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Standard Cost Accounting for FOH
• Actual FOH is measured not only against applied
overhead, but also against a budget based on actual
activity and a budget based on standard activity allowed
for actual production.
• Example :
• Normal capacity in DLH
1,600 DLH
• Total FOH at normal capacity :
variable…………………… $ 4,800
fixed ………………………
19,200 $ 24,000
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Example for FOH
•
•
•
•
•
•
FOH rate per direct labor hour :
Variable …………………………. $ 3
Fixed ……………………………..
12
$ 15
Actual FOH ………………………….
$ 24,442
Actual DLH ………………………….
1,632
Standard hours allowed for actual production
1,504
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Journal for FOH
• Journal entry records actual FOH :
• FOH Control ………………………. $ 24,442
•
Various Credit ………………….
$ 24,442
• Note : various credit = usage of indirect material, indirect
labor, and factory cost like acc. depreciation, prepaid
insurance, prepaid rent and cash.
• Journal entry records applied FOH :
• Work In Process ($15x1,504) …..
$ 22,560
•
Applied FOH …………………...
$ 22,560
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Two-Variance Method
• The Balance in the FOH control account is divided
between the controllable variance and the volume
variance.
• Journal entry to close the FOH account :
• FOH volume variance ($12x96 hours) $1,152
• FOH controlled variance
710
•
FOH control ($24,422-$22,560)
$ 1,862
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Three-Variance Method
• The amount of over or under applied FOH is analyzed
as spending, variable efficiency and volume variance.
• Journal entry to close FOH control:
FOH volume variance ($12x60,000)…….. $ 1,152
FOH variable efficiency variance ………..
384
FOH spending variance ………………….
326
FOH control ……………………………
1,862
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Disposition of Variance
• Variance can be disposed of in one of two ways :
• Variances treated as period expenses
• Variances allocated to Cost of Goods Sold and Ending
Inventories
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CONCLUSION
• Standard Cost Accounting for Materials, Labor, and
FOH
• Standard Cost Accounting for Complete Products
• Alternative FOH Methods
• Disposition Variance
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