Standard cost card, Cost Accounting

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Standard Cost Card

It is a card record of the Standard or expected costs in producing a specified output.  This gives the physical quantities of inputs and also their monetary values. This gives also the quality required. As an example:  Grade a labour.

The setting process of standards results in the establishment of the standard cost for the product. The make-up of the standard cost is recorded on a standard cost card. As an example: a standard cost card in a company's X004 product would look given as:

Assuming the given product details as:

1. The product passes via department A, B, and C

2. It consume the following two types of direct materials as:

            P10:  2.5 kg (kilo-gram) each @ Shs.14.8:  it is applied in department A

            A53:  1000 units @ shs.3.75 per 100 units:  It is applied in department B.

3. X004 also used direct labour given as:

Grade M:  4.8 hours @ Shs.2.5/hr in Department A

Grade N:  9.2 hours @ Shs.2.5/hr in Department B.

Grade O:  (Assembly time):  16.4 hours @ Shs.1.75/hr in Department C.

4. Production overheads are applied given as:

Machine overheads:  based on direct labour hours. They are incurred like shs.11/hr in departments A and B.

Indirect labour:  based on direct labour hours in Department C above at shs.6/hr.

Required

Prepare or get ready a standard cost card for product X004.

Solution:

Standard Cost Card For Product X004

Revised:  31.12.2004 By:  Aron

Cost Type and Quantity

Standard Rate (shs)

Department A (shs)

Department B (shs)

Department C (shs)

Total (shs)

Direct Material

 

 

 

 

 

2.5kg of P10

14.8

37

-

-

37.00

1000 units of A53

3.75 per

-

37.5

-

37.50

 

100 units

 

 

 

74.50

Direct Labour

 

 

 

 

 

Grade M: 4.8hrs

2.5

12

-

-

12.00

Grade N: 9.2hrs

2.5

-

23

-

23.00

Grade O: 16.4 hrs

1.75

-

1

28.70

28.70

 

 

 

 

 

63.70

Production Overheads

 

 

 

 

 

Machining:

11

58.20

101.12

-

153.92

Indirect Labour

6

-

-

98.4

98.4

 

-

101.80

161.62

127.10

252.32

 

Standard Cost Summary:

 

 

 

 

Shs.

 

 

 

Direct Materials:

74.50

 

 

 

Direct Labour

63.70

 

 

 

Production Overheads

252.32

 

 

 

Standard cost per unit

390.52

 

 

 


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