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State Direct material cost standard
The determination of direct material cost standard would involve:
a) Determination of quantity standards and
b) Determination of price standards
For determination material quantity standards for each material going as an input in the product, it is necessary to develop a product design and material specification as an input in a scientific manner on the basis of experiments/test runs. These specifications must be adhered to except in special circumstances when a revision is to be effected. If any should also be seceded on the basis of past experience or scientific analysis.
In this method, approximation of various assets here excluding cash and including liabilities are made getting into consideration the transactions in the ensuring period. Afterward
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Classification and computation of variances The computation and analysis of variances is the main aim of standard costing. The variance is the difference among the standard pe
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