Hi,
I work one month for a company that wants to introduce standard costprice.
Now I am trying to figure out the following.
Every month, labor costs are 40K, which are presented in the P&L. BS is zero, as transaction goes via Bank the same month.
Now, let's imagine we introduced a standard labor costs of 1000 euro per produced item X (normal production is 40 items)
In month Y we sell 30 items and production is 20 items. What should be booked and where?
I would think:
Revenue: 30 items x price
Labor costs: 30 items x 1000 euro = 30K euro
Labor efficiency: (20 - 40) x 1000 euro = -20K euro
But how can I match this with the amount of 40K that we should pay to the employees? Does this go to BS and which line?
Hopefully someone can help me, I keep starring at the numbers but cannot figure it out...
Thank you.
Regards,
Karin
I work one month for a company that wants to introduce standard costprice.
Now I am trying to figure out the following.
Every month, labor costs are 40K, which are presented in the P&L. BS is zero, as transaction goes via Bank the same month.
Now, let's imagine we introduced a standard labor costs of 1000 euro per produced item X (normal production is 40 items)
In month Y we sell 30 items and production is 20 items. What should be booked and where?
I would think:
Revenue: 30 items x price
Labor costs: 30 items x 1000 euro = 30K euro
Labor efficiency: (20 - 40) x 1000 euro = -20K euro
But how can I match this with the amount of 40K that we should pay to the employees? Does this go to BS and which line?
Hopefully someone can help me, I keep starring at the numbers but cannot figure it out...
Thank you.
Regards,
Karin