ACCOUNTING
the standard quantity or hours and the standard price or rate required to produce a unit of a specific product is shown on a standard ________
cost card
excessive inventory on hand, especially in the work in process inventory account, leads to:
increased defects, inefficient operations, obsolete goods
the difference between the actual hours used and the standard hours allowed for the actual output is used in the calculation of the __________
labor efficiency variance
standard costs are a key element in the _______ approach utilized by some companies
management by exception
the standard labor rate per hour:
may be a single rate for all employees in a department
an unfavorable materials quantity variance:
occurs when the actual amount of material used is greater than the standard amount of material allowed for the actual output period
the materials _________variance reflects the difference between the actual price paid for the material and what should have been paid according to the standard
price
the ________ supervisor is generally responsible for controlling the labor rate variance
production
the ________ is usually responsible for controlling the labor efficiency variance
production manager
Material Quantity Variance
SP(AQ-SQ)
Labor efficiency variance
SR(AH-SH)
variable overhead efficiency variance
SR(SH-AH)
the materials price variance is calculated using the ______quantity of the input purchased
actual
direct labor variances
are computed in the same way as material variances
standard costs may:
be used to compute both flexible budget activity and spending variances
Standards are:
benchmarks for measuring performance, compared to the actual quantities, and costs of inputs, set for each major production input
True or False: quantity standards refer to the price to be paid for each unit of the input
false
Warren, Inc. standard cost card indicates that each widget should require 2 Ibs. of material. In july warren budgeted 2,000 widgets and actually produced 1500 widgets. each widget produced used 2.2 of material. the standard quantity of materials allowed for july is:
3000 pounds
Labor rate variance
AH(AR-SR)
Material Price Variance
AQ(AP-SP)
the standard price per unit for direct materials:
can change as a result of change in the delivery method, is based on the quality of material to be purchased
a favorable labor rate variance is always favorable for a company: true or false
false
true or false:The standard hours or quantity allowed for an input is the amount of input that should have been used to produce the standard output for the period
false
an _______materials price variance occurs when the standard price is higher than the actual price
favorable
when the actual quantity of materials used is less than the standard quantity allowed, the material quantity variance is labeled as _______
favorable
poor supervision is one possible cause of an unfavorable_________variance
labor efficiency
________ standards specify how much input should be used to produce a product or provide a service
quantity
the difference between the amount of an input used and the amount that should have been used, all evaluated at the standard price for the input, is called a:
quantity variance
The _____ price per unit of an input should reflect the expected cost of the raw materials less any discounts taken
standard
a benchmark used in measuring performance is called a(n)
standard
a price _______ indicates how much should be paid for an input
standard
the amount of an input that should have been used to produce the actual output is known as the _______quantity or hours allowed
standard
standard quantities and the cost of inputs to make a single product are accumulated on a(n) _______card
standard cost
the most difficult standard to determine is probably the:
standard hours per unit
a price variance is the difference between:
the actual price and the standard price multiplied by the actual amount of the input
the standard rate per direct labor-hour includes:
the base rate per hour, fringe benefits, and the employer share of payroll taxes
if managers consider it unwise to adjust the workforce in response to changes in workload:
the direct labor workforce is really fixed in the short run
if the actual level of activity is greater than the planned level of activity, the activity variances will be:
unfavorable
the standard cost for ________ manufacturing overhead is computed the same way as the standard cost for direct labor
variable