When you complete this course, you will be able to:
Variances arise naturally in standard costing because a standard cost is a long term average cost. In any period, actual costs may be higher or lower than standard costs, but in the long run, these should cancel out if the process is under control. This CPE course explores variance investigation, including when a variance should be investigated. It explains different interpretations of variances as well as possible interdependence between variances. In addition, it includes the controllability principle, standard costing in the modern manufacturing environment as well as McDonaldization. The course also explores advanced material variances, how to calculate mix and yield variances, advanced labor variances, planning and operational variances, causes of planning variances, as well as the benefits and problems of planning variances.