Faizullah khan

ROLL NO.AH-522997
MBA (FINANCE)
 TOPIC

Application of standard costing

in a manufacturing concern
keeping in a view the various
variances.
 Introduction to issue
 Standard costs are usually
associated with a manufacturing
company's costs of direct
material, direct labor, and
manufacturing overhead.
 Situations in Standard Cost:
 If actual costs are less than
standard costs:
 If actual costs are greater than
standard costs:
 Process of Standard Costing:

1 -Distinguish between a standard and a budget.

2 -Identify the advantages of standard costs.
3 -Describe how standards are set.
4 -Discuss the reporting of variances.
 Practical study of the
organization
 Levi s denim.
 History of levi,s Strauss
In 1853, Leob Strauss,
San Francisco in France
opened a small wholesale business that
supplied miners and workers with work
clothes that were strong and did not
tear easily.
Later in 1872, Jacob Davis. Davis had
the interesting idea of adding copper
rivets to the corners of the pockets to
the waist overalls Levi Strauss had
produced.
 Examples of Standard
Cost of Materials and
Price Variance  
Date Account Name Debit Credit

Jan. 8, 2010 Direct Materials Inventory 3,000

Accounts Payable 2,900

Direct Materials Price Va 100

riance
Example -2
Date Account name Debit Credit

Mar Direct Material inventory 9000

2010 Direct material price variance 150
Account payable 9150

Example-3

Date Account name debit Credit

Juna 1 Direct material inventory 9000

2010
Direct material price variance 240

Account payable 8760

 SWOT Analysis
• Strengths :
 Levi’s follows a high standard of quality.
• Enhancing the consumer retail experience.
• Levi’s products are unique and innovative in the
style.
 Levi’s enjoys high brand equity.
• The products are renowned and are considered
as the most durable.
 Weakness:
 Levi’s products are considered as expensive.
Therefore a large
 percentage of people are reluctant to buy the
products.
 Many Competitors with better prices.
 Weak in the information technology systems.
Opportunities :

 Levi’s can do more well in the women section. This section is

give
 less importance as compared to the men section.

 The kid’s section, which has been started from few years,
should also
 be given proper attention to gain customers.

 Sales promotion can be increased by increasing the

advertisements
 expenses so as to enjoy a large number of customers.

Threats:
 Intense competition in the worldwide apparel industry could
lead to
 reduced sales and prices.

 The revenues are influenced by general economic

conditions
 DATA COLLECTION
 Data are collected by
Financial Management
books, online articles
 CONCLUSION
 I concluded that almost progress of
various departments of organization is
satisfactory. Accounting For Cash & Short-
Term Investment Statement highlights the
financial health of levis denim because this
analysis highlights the correct financial
picture of this organization. Due to this
analysis financial analyst is able to
compare the financial position of Levis
Denim with other organization.
 RECOMMENDATIONS
 In order to avoid the misallocation of funds financial manager
should have to make the plan before of financial decision. This
plan include whether the investment required or not.

 Levis denim should have to use a computer based spreadsheet

program for quickly analyzing financial statements.

 To plan for the future the financial manger must assess the firm’s
present financial position and evaluate opportunities in relation
to this current position.

 There is need of well-experienced financial manager, because

inexperienced financial manager cannot analyze the financial
statement in an effective way.

 Company should employ a high experienced Financial person, to

analyze the market to utilize the short-term investment to get the
maximum profit.
 Reference
 Book Business.
 Organization data is collect to
articles.
 Cost accounting (planning and
control) seventh edition. written by
Adolph Matz and Milton F. Usry .
Thank You