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Explain the accounting entries necessary in a standard cost system.

Explain the accounting entries necessary in a standard cost system.
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Entries in standard costin Some pointers a)Entry already feeded in software bstandard rate is to be fixed by management accountant on the bais of research c)Software has a blink features where variances will continue to blink unti noticed noticed by pr oduction manager using his password d)Actual rate for actual basis of invoice elActual quantity automaticaa on:Feeded rchase manager on the ed in material control acccunt Now we come to entries FOR Material Debit Credit Material control account Std rateactual quantit Material price variance (Bal Fig.) Actial rateactual ourchase of material) Actial rateactual quant Cash payment to supplier budgeted quantity for 1 unit of finished goods actual output standard rate WIP control acccount Material usage variance(Bal Fig Material control Account Std rate actual quantit For this entry I will explain a few thi Budgeted cuantity for 1 unit of finished good:fixed by management accountant on the basis of resource quanti tandard rate already fixed in WIP feeded by the production manager cn the basis of Difference of entry:material usage varaiance (Difference Std.Qty and actual qty, at standard rate) WIP debited by standard cost for actual production For Labor Debit Credit Wages control account Std rateactual labor hours Labor rate variance Wages Payable account Actual rate actual labor hours b) able Actual rate actual labor hours Actual rateactual labor hours Cash Pavment of wages budgeted Hours for 1 unit of finished goods actual output standard rate WIP Control account Labor effeciency variance labor control account Labor charged to production Std rateactual labor hours or Overheads Debit Credit a) WIP control account Standard cost for actual output Overhead cost variance Overhead p le/department Actual cost Overhead expenditure and overhead volume variance will be calculated as tial plan method and entered in joumal ent Debit Credit Fxed overhead vdlume varaince Fxed overhead expenditure varain Overhead cost variance In this entry if the variance is favourable you credit and if it adverse you debit it Note:Wherever balancing figure in varlances is entered you debit it when it is adverse and credit when it is favourable I have default shown it as debit can change it

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