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Chapter 11: Standard Costing-Part 3
Standard costs are pre-determined cost. Standard costing is a control system for comparing the planned costs and revenues with actual results in order to report variances for the purpose of performance measurement and control.
By the end of this lesson, you should be able to:
- calculate variable overhead expenditure variance, variable overhead efficiency variance;
- calculate fixed overhead expenditure variance, fixed overhead efficiency variance, fixed overhead capacity variance;
- explain the causes generated from variance; and
- describe benefits of reconciliation of budgeted and actual profit for variance