MGT133HW3 - 141 146

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14-1 Standard cost is what the firm should incur for an operation Flexible budget is a budget which adjusts revenues and expenses  to the actual level achived This means that both of these are estimation but when used together  one can perfom short-term profit analysis. 14-6 A good example of changes between standard cost and actual cost is starbucks and their cost for coffe. An abrubt change in coffe beans will chage the actual cost compared to the standard cost. 14-7 Cost 0.9 this shows that the costs was actually  Production 0.8 higher relatively to production In other words, he did a bad job 14-9 Any purely variable cost is a function of 2 factors, price and quantity. Thus, any flexible-budget variance for direct labor should be  decomposed in to 2 categories Price (rate) variance and Quantity (efficiency) variance. 14-12 Yes it will affect the direct labor variance in the rate variance
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