PARTICULARITIES CONCERNING THE CALCULATION AND ANALYSIS OF DEVIATIONS FROM STANDARD COSTS WITH DIRECT MATERIALS, IN THE ROMANIAN CHARCOAL MINING INDUSTRY - Polish Journal of Management Studies

Search
Polish Journal of Management Studies
 ISSN 2081-7452
Go to content

Main menu:

PARTICULARITIES CONCERNING THE CALCULATION AND ANALYSIS OF DEVIATIONS FROM STANDARD COSTS WITH DIRECT MATERIALS, IN THE ROMANIAN CHARCOAL MINING INDUSTRY

Abstracts > Vol 1


PARTICULARITIES CONCERNING THE CALCULATION AND ANALYSIS OF DEVIATIONS FROM STANDARD COSTS WITH DIRECT MATERIALS, IN THE ROMANIAN CHARCOAL MINING INDUSTRY

Man M., Dima I.C.*


Abstract


During the production process one should operatively survey pre-established (standard) costs with a view of determining and analyzing deviations as costs are settled at the level of an activity considered to be normal while real activity can display deviations  from this. The system of analysis and control of standard costs differs depending on the direct or indirect character of the expenditures. Nevertheless, irrespective of the character of the expenditures, the analysis and control of standard costs have  as a goal the determining (calculation) of deviations, namely of the minus or plus differences between real costs and standard costs. The final objective is the finding out of the causes that have determined deviations, the adopting of corrective measures,  and the determining of responsibilities. As regards raw materials and direct materials, deviations represent plus or minus differences as a result of: exceeding or disregarding specific consumptions, price changes, and the use of materials having other  sizes or quality as compared with the ones envisaged by the budget, etc. (JEL: C13, D24, L23)

Key-words: standard cost, real (effective) cost, quantity deviation, price deviation, composition deviation, deviations report, deviations analysis.

Introduction


The basic function of standard costs consists in being a measuring and comparing standard of effective and standard expenditures; they consequently exert a systematic control upon  such expenditures. Accordingly, the implementation of the standard cost method in industrial units implies [1]:
 The comparison of effective costs with standard costs and the measuring of the deviations as compared with standard costs;
 The analysis of the deviations from the point of view of their character, size, and causes;
 The determining of measures capable of stopping unfavorable deviations and ranging effective costs within settled standards.

Deviations represent savings or over-passing the standard costs afferent to manufactured production. They should be seen either as an expenditures increasing or as an expenditures decreasing and not as rectifications of standard costs [2].

As regards the consumption of raw materials/direct materials one should distinguish between the product whose manufacturing requires only one material and the more complex product that requires the combination of several raw materials/materials  [3].


... more in full version

Summary


Standard costs are ante-calculated costs (pre-settled) according to rigorous scientific standards. Standard cost is both a measuring and comparing standard with effective achieved  cost and an instrument of orientation and establishing the normal circumstances according to which production should take place.

The analysis of the deviations noticed between REAL (effective) and STANDARD (budget) can be done according to several levels within a mining unit. For example, the comparative analysis of the effective production cost and of the standard cost afferent  to production is the responsibility of the general manager of the mining unit as he/she is the one who is responsible for the financial results obtained.
On the other hand, the data regarding the deviations at an inferior level (e.g.: deviation from the consumption of materials) is the responsibility of the managers belonging to an inferior hierarchic level (department managers). Each manager has to interpret  the deviations which he/she is responsible for. No deviation should allow ambiguous interpretations. Accordingly, a methodology of selecting significant deviations is absolutely necessary [4].

The calculation, analysis, and report of the deviations from standard costs should be based upon criteria of economic efficiency as the analysis of a business is justified only in case the benefits expected from such an analysis are higher than expenditures.  Out of practice managers learn that there are low deviations that are carefully examined as they can determine serious consequences upon the financial result.
At the same time, there are high deviations which, only in case they overpass a certain level, need to be analyzed as their influence upon the financial result is quite limited.


References

[1]   Calin O., Man M., Nedelcu M.V., Contabilitatea manageriala, Didactic and Pedagogic Publishing House, Bucharest 2008.
[2]   Cucui I., Man M., Costurile si conrolul de gestiune, Economic Publishing House, Bucharest 2004.
[3]   De Ronge Y., Cerrada K., Controle de gestion, Pearson Education France, 2005.
[4]   Dima I.C., Man M., Control de gestiune, AGIR Publishing House, Bucharest 2006.
[5]   Horngren C.T., Datar S.M., Contabilitatea costurilor, o abordare manageriala, ARC Publishing House, Chisinau 2006
[6]   Man M., Contabilitate de gestiune si calculatia costurilor, Scrisul Romanesc Publishing House, Craiova 1998.
[7]   Skowron-Grabowska B., Simulation of Supplies and Distribution Logistics System [in:] WMSCI 2005.The 9 th World Multi-Conference on Systemics, Cybernetics and Informatics.Vol.III.Orlando, Florida 2005


SZCZEGOLY DOTYCZACE OBLICZANIA I ANALIZOWANIA ODCHYLEN OD STANDARDOWYCH KOSZTOW MATERIALOW BEZPOSREDNICH W PRZEMYSLE WEGLA DRZEWNEGO W RUMUNII


Streszczenie

Podczas procesu produkcji nalezy prowadzic badania ustalonych z gory (standardow) kosztow w celu okreslenia i analizowania odchylen kosztow rozliczanych na poziomie dzialalnosci,  podczas gdy rzeczywiste dzialania moga wykazywac od nich odstepstwa. System analiz i kontroli kosztow standardowych rozni sie w zaleznosci od bezposredniego lub posredniego charakteru wydatkow. Niemniej jednak, niezaleznie od charakteru wydatkow, analizy  i kontrola kosztow standardowych, maja na celu okreslenie (obliczenie) odchylen, czyli ujemnych lub dodatnich roznic miedzy rzeczywistymi kosztami a kosztami standardowymi. Ostatecznym celem jest ustalenie przyczyn, ktore powoduja odchylenia, podjecie  dzialan naprawczych i okreslenie obowiazkow w tym zakresie. W odniesieniu do surowcow i materialow bezposrednich, odchylenia stanowia dodatnie lub ujemne roznice, jako efekt: uwzgledniania szczegolnej konsumpcji, zmian cen oraz stosowania materialow o  innych rozmiarach i jakosci w stosunku do tych przewidzianych w budzecie, itp.




 
Back to content | Back to main menu