chapter 11- Standard costs and balanced

Question 1

OH rate

Answer 1

budgeted OH costs / expected standard activity index

Question 2

Variance

Answer 2

is the difference between total actual costs and total standard costs.

Question 3

unfavorable variance

Answer 3

Actual costs > standard costs

Question 4

Favorable variance

Answer 4

Actual costs < standard costs

Question 5

materials variances

Answer 5

Factors that affect the price paid for raw materials

Question 6

materials price variances affected by:

Answer 6

• ability of quantity and cash discounts
• quality of materials requested
• delivery method used

Question 7

materials quantity variance cause

Answer 7

is the variance is due to inexperienced workers, faulty machinery or careless ness the production department is responsible

Question 8

causes of Labor price variance

Answer 8

1. paying workers different wages than expected

2. misallocation of workers

Question 9

causes Labor quantity variances

Answer 9

1.relates to efficiency of workers

Question 10

Value chain

Answer 10

1. research and development.
2. acquisition of raw materials
3. production
4. sales and marketing
5. delivery
6. customer relations

Question 11

Just in time inventory

Answer 11

inventory system in which goods are manufactured or purchased just in time for sale

Question 12

Total quality management

Answer 12

reduce defects in finished products wit the goal of zero defects

Question 13

Activity based costing

Answer 13

• allocate overhead based on use of activities

- results in more accurate product costing

Question 14

theory of constraints

Answer 14

• limits the company’s potential profitability

- a specific approach to identify and manage these constraints in order to achieve company’s goals

Question 15

Enterprise Resource Planning

Answer 15

software programs design to manage all major business process

Question 16

corporate social responsability

Answer 16

considers a company’s efforts to employ sustainable business practices with regard to its employees society and environment

Question 17

triple bottom line

Answer 17

it evaluates a company’s performance with regard to people , planet and profit

Question 18

balanced score card

Answer 18

incorporates financial and non-financial measures in an integrated system that links performance measurement and company’s strategic goals

Question 19

balance score card evaluation performance

Answer 19

financial –> customer –>internal process –> learning and growth

Question 20

customer objective

Answer 20

• percentage of customers who would recommend product
• customer retention
• response time per customer request
• brand recognition
• customer service expense per customer

Question 21

internal process

Answer 21

• % of defect free products
• stockouts
• labor utilization rates
• waste reduction planning accuracy

Question 22

learning and growth

Answer 22

• %of employees leaving in less that one year
• number of cross trained employees
• ethics violations
• training hrs.
• reportable accidents

Question 23

financial perspective

Answer 23

is the most common approach to performance evaluation