Standard Costs and Variance Analysis Flashcards
The rate of output which qualified workers can achieve as an average over the working day or shift, without over-exertion, provided they adhere to the specified method of working and are well motivated in their work.
Standard performance.
(T/F) The best characteristic of a standard cost system is that standards can pinpoint responsibility and help motivation.
True.
(T/F) Standard costs are used for income determination.
False.
Normal costing and standard costing differ in that…
The two systems show different volume variances if standard hours do not equal actual hours.
The standard that intends to represent challenging yet attainable costs.
Normal standard.
(T/F) A company using very tight standards in a cost system should expect that most variances will be unfavorable.
True.
(T/F) A predetermined OH rate for fixed costs is unlike a standard fixed cost per unit in that a predetermined overhead rate is based on an input factor, while a standard cost per unit is based on a unit of output.
True.
If a company wishes to establish factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels, it should prepare a ____ budget.
Flexible.
Distinguish a fixed budget from a flexible budget.
Fixed/static - plan for a single level of activity
Flexible - plan for several levels of activity
Which of the ff. terms is best identified with a system of standard cost?
A. Contribution approach
B. Management by exception
C. Marginal costing
D. Standard accounting system
B. Management by exception
The department typically responsible for materials price variance.
Purchasing.
Materials efficiency variance is the responsibility of _____ and ______.
Production and industrial engineering.
The variance resulting from obtaining an output different from the one expected on the basis of input is the:
Yield variance
Labor ____ variance is directly affected by the relative position of a production process on a learning curve.
Efficiency.
Expenses estimated for the capacity attained differ from actual expenses incurred
Budget variance
