CH 12 PPT Flashcards

1
Q

What are standards and who gives them

A

they are common in business often from the government (regulations)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what are standard costs

A

predetermined unit costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Standard costs are used as mesures of what

A

performance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

how are standards adn budgets the same

A
  1. use predetermined csots

2. part of management planning and control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

a standard is a __________ amoutn where a budget is a ________

A

unit

total

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the advantages of standard costs

A
  1. Facilitates managements planning
  2. Promotes economy by making employees more cost conscious
  3. Help set selling prices
  4. Contribute to management control by providing a basis for evaluation of cost control
  5. Help highlight variances in management by exception
  6. Simplify costing of inventories and reduce clerical costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is required when you set standard costs?

A

Requires input from all persons who have responsibility for Ciara and quantity

Costs should be current and under continuous review

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are two levels of standard costs

A
  1. Ideal standards

2. Normal standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does idea standard represent?

A

Optimum levels of performance u dee perfect operating conditions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What does normal standard represent?

A

Efficient levels of performance attainable under expected operating conditions (rigorous but attainable)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is direct material price standard

A

Cost per unit if DM that should be incurred

Bases on purchasing departments best estimate of the cost of raw materials

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What does standard DM price also include

A

Includes related costs such as receiving, storing and handling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is direct materials quantity standard?

A

The quantity of DM that should be used per unit of finished goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the direct materials quantity based on?

A

Based on physical measures such as lbs, kg, barrels etc

Considers both quantity and quality of materials required

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What does DM quantity standard include

A

Allowance for unavoidable waste and normal storage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How do you calculate the standard DM cost per unit

A

Standard DM price x standard DM quantity = standard DM cost per unit

17
Q

What is direct labour price standard

A

the rate per hour that should be incurred for direct labour

18
Q

What is the direct labour price standard based on

A

based on current wage rages adjusted for anticipated chagnes such as cost of living adjustments

19
Q

What does direct labour standard cost include

A

employer payroll taxes adn benefits holiday and vacation pay

20
Q

What is direct labour quantity standard

A

time that should be required to make one unit of the product

  • critical in labour intensive cmopanies
  • allowance should be made for rest periods, cleanup, machine setup and machine downtime
21
Q

How do you calculate standard direct labour cost per unit

A

standard direct labour rate x standard direct labour hours = standard DL cost per unit

22
Q

what is the manufacutring overhead standard

A

a standard predetermined ovrehead rate is used

23
Q

what is the calculation for standard MOH

A

budgeted overhead costs / expected standard activity index

24
Q

What is the total standard cost per unit

A

sum of standard csot for DM, DL and MOH

- done for each product and often recorded on a standard cost card

25
What is a standard cost card
provideds the baisis for determining variances from standards
26
What is the variances from standard csots
difference between total actual costs and total standard
27
When actual costs are higher than standard it is called
unfavorable vairaince
28
if quality control standards are sacrficed THE VARIANCE IS
NOT FAVORABLE