Question

if standards costs for DM, DL, VOH, FOH did not provided, how can I create standards by using the actual operationg results?

Answer 1

In case of direct material variance:

Although there is no standard cost the budgeted cost and volume in units must be given in order to get standard cost per unit, then it should be multiplied with actual direct material units to get the total standard cost.

Standard cost per unit = Budgeted direct material cost / Budgeted units

Total standard cost for actual units = Standard cost per unit × Actual direct material units

In case of direct labor variance:

Although there is no standard cost the budgeted cost and volume in labor hours must be given in order to get standard cost per hour, then it should be multiplied with actual direct labor hours to get the total standard cost.

Standard cost per hour = Budget direct labor cost / Budgeted labor hours

Total standard cost for actual hours = Standard cost per hour × Actual direct labor hours

In case of variable overhead variance:

Although there is no standard cost the budgeted cost and volume in machine hours must be given in order to get standard cost per machine hour, then it should be multiplied with actual machine hours to get the total standard cost.

Standard cost per machine hour = Budget variable cost / Budgeted machine hours

Total standard cost for actual machine hours = Standard cost per machine hour × Actual machine hours

In case of fixed overhead variance:

Although there is no standard cost the budgeted cost and volume in units must be given in order to get standard cost per unit, then it should be multiplied with actual units of production to get the total standard cost.

Standard cost per unit = Budget fixed cost / Budgeted units of production

Total standard cost for actual production = Standard cost per unit × Actual units of production