Beginner’s Guide to Standard Costing | Step-by-Step Tutorial (Part 2)

In this tutorial, we break down mix and yield variances for direct materials and direct labor, showing how they fit within the broader concept of materials quantity and efficiency variances. You’ll also learn a simple template approach to solve these variances quickly and accurately. We then explore the flexible budget, highlighting how it adapts to all levels of activity within the relevant range—unlike the static budget, which focuses only on one activity level. Next, we cover the journal entries for materials and labor variances, explaining when they should be closed to cost of goods sold if immaterial, or prorated across COGS, Work in Process, and Finished Goods if material. By the end, you’ll have a clear path to mastering Standard Costing and applying it effectively in practice. 👉 Don’t forget to subscribe and hit the notification bell so you never miss an update! ------------------------------------------------------------------------------------------------------------------------------------------------- Timestamps: 00:00 - 03:40 - Introduction to Mix & Yield Variance 03:41 - 18:24 - Direct Materials: Mix & Yield Variance Explained 18:25 - 27:19 - Direct Labor: Mix & Yield Variance Explained 27:20 - 39:07 - Flexible Budget Concept + Problem 3 39:08 - 49:58 - Static Budget Concept + Problem 4 49:59 - 1:00:43 - Journal Entries for DM & DL Variances 1:00:44 - 1:09:05 - Closing of Variances + Theories