Standard Costing
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 82 rapid-fire Q&A cards.
What are examples of fixed overhead expenditures?
Rent, depreciation, supervisors' salaries, factory insurance.
Can fixed overheads change despite being 'fixed'?
Yes, due to price increases, salary increments, personnel deployment, depreciation policy changes.
What is the primary purpose of standard costing?
Identify inefficiencies (variances) and enable management corrective action.
Why must variance reporting be prompt?
Delays prevent timely corrective action; losses accumulate while causes are still being found.
Why separate variances by cost centre?
Prevent misleading attribution; ensure corrective action targets the correct responsibility centre.
Should uncontrollable variances be reported to management?
Yes, they inform pricing, hedging, and contract-clause decisions despite being uncontrollable.
What three report formats suit different management levels?
Colour-coded dashboards (senior), drill-down detail (shop-floor), exception reports (line managers).
How do banks apply standard costing for internal cost control?
Set per-transaction, per-account benchmarks; track expenditure and efficiency variances by channel.
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More chapters in Module D - Taxation and Fundamentals of Costing
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