standard costing

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Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2010 when do we exactly calculate Revised Standard quantity?
i have been told where the total of standard mix & actual mix is different then we calculate RSQ...what does standard & actual mix means?is it related to % of the inputs used in making output or is it the units of inputs used in making output?and is it correct to say that the difference between the two may be because of normal loss?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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05 July 2010 Standard mix is the pre fixed like budget, a standard process will consum that particular percentage of materials

Actual mix means, actually consumed materials for that particular process

we cannot conclude because of normal loss only the standard mix and actual mix will differ the following reasons also

1. Low quality materials
2. In effective usage of material by labours
3. Wrongly calculated standard mix which is actually less or high

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