ch22 - Chapter 22 The Navigator Scan Study Objectives Read...

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Chapter 22 The Navigator Scan Study Objectives Read Preview Read Chapter Review Work Demonstration Problem Answer True-False Statements Answer Multiple-Choice Questions Match Terms and Definitions Solve Exercises S TANDARD COSTS AND BALANCED SCORECARD CHAPTER STUDY OBJECTIVES After studying this chapter, you should be able to: 1. Distinguish between a standard and a budget. 2. Identify the advantages of standard costs. 3. Describe how standards are set. 4. State the formulas for determining direct materials and direct labor variances. 5. State the formulas for determining manufacturing overhead variances. 6. Discuss the reporting of variances. 7. Prepare an income statement for management under a standard costing system. *8. Describe the balanced scorecard approach to performance evaluation. *9. Identify the features of a standard cost accounting system. *Note: All asterisked (*) items relate to material contained in the Appendix to the chapter. The Navigator PREVIEW OF CHAPTER 22 In this chapter we continue the study of controlling costs by considering additional measures that permit the evaluation of performance. The content and organization of the chapter are as follows: Need for Standards Standards vs. Why Standard Costs? Ideal vs. Normal Case Study Setting Standards Variances from Standards Statement Presentation Analyzing Reporting STANDARD COSTS AND BALANCED SCORECARD Budgets The Navigator Balanced Scorecard
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22-2 Kimmel Accounting: Tools for Business Decision Making _____________________________________________________________________________ CHAPTER REVIEW Standards and Budgets 1. (S.O. 1) In concept, standards and budgets are essentially the same. Both are pre- determined costs and both contribute significantly to management planning and control. a. A standard is a unit amount, whereas a budget is a total amount. b. Standard costs may be incorporated into a cost accounting system. Why Standard Costs? 2. (S.O. 2) Standard costs offer the following advantages to an organization: a. They facilitate management planning. b. They promote greater economy by making employees more "cost conscious." c. They are useful in setting selling prices. d. They contribute to management control by providing a basis for the evaluation of cost control. e. They are useful in highlighting variances in management by exception. f. They simplify the costing of inventories and reduce clerical costs. Setting Standard Costs 3. (S.O. 3) Setting standards requires input from all persons who have responsibility for costs and quantities. Standards may be set at one of two levels. Ideal standards represent optimum levels of performance under perfect operating conditions. Normal standards represent efficient levels of performance that are attainable under expected operating conditions. 4.
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This note was uploaded on 08/02/2009 for the course BUAD 305 taught by Professor Davila during the Fall '07 term at USC.

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ch22 - Chapter 22 The Navigator Scan Study Objectives Read...

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