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Accounting

Terms in this set (10)

What is a standard cost?
A budget for the production of one unit of product or service
The term management by exception refers to which of the following?
Investigating significant cost variances
Which of the following can be obtained only under nearly perfect operating conditions?
Perfection standards
Direct material 3 pounds at $2.50 per pound $7.50
Direct labor 5 hours at $7.50 per hour 37.50
Actual results:
Units produced 7,800 units
Direct materials purchased 26,000 pounds at $2.70 $70,200
Direct materials used 23,100 pounds at $2.70 62,370
Direct labor 40,100 hours at $7.30 292,730
$5,200U.
Cost standards for one unit of product no. C77:
Direct material 3 pounds at $2.50 per pound $7.50
Direct labor 5 hours at $7.50 per hour 37.50
Actual results:
Units produced 7,800 units
Direct materials purchased 26,000 pounds at $2.70 $70,200
Direct materials used 23,100 pounds at $2.70 62,370
Direct labor 40,100 hours at $7.30 292,730
$8,250U
When a firm uses perfection standards, the variances for direct materials and direct labor will most likely always be favorable.
False
The term management by exception refers to which of the following?
Investigating significant cost variances
A standard cost is a budget for the production of one unit of product or service.
True
Cost standards for one unit of product no. C77:
Direct material 3 pounds at $2.50 per pound $7.50
Direct labor 5 hours at $7.50 per hour 37.50
Actual results:
Units produced 7,800 units
Direct materials purchased 26,000 pounds at $2.70 $70,200
Direct materials used 23,100 pounds at $2.70 62,370
Direct labor 40,100 hours at $7.30 292,730
The direct-material quantity variance is:
750f
Cost standards for one unit of product no. C77:
Direct material 3 pounds at $2.50 per pound $7.50
Direct labor 5 hours at $7.50 per hour 37.50
Actual results:
Units produced 7,800 units
Direct materials purchased 26,000 pounds at $2.70 $70,200
Direct materials used 23,100 pounds at $2.70 62,370
Direct labor 40,100 hours at $7.30 292,730
The direct-labor rate variance is:
8020f
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