Chapter 10 Part I Theory Questions

Chapter 10 Part I Theory Questions - 10-5 Under management...

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Chapter 10 Standard Costs and Overhead Analysis Solutions to Theory Questions 10-1 A quantity standard indicates how much of an input should be used to make a unit of output. A  price standard indicates how much the input should cost. 10-2 Ideal standards assume perfection and do not allow for any inefficiency. Thus, ideal standards are  rarely, if ever, attained. Practical standards can be attained by employees working at a reasonable, though  efficient pace and allow for normal breaks and work interruptions. 10-4 A budget is usually expressed in terms of total dollars, whereas a standard is expressed on a per  unit basis. A standard might be viewed as the budgeted cost for one unit.
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Unformatted text preview: 10-5 Under management by exception, managers focus their attention on results that deviate from expectations. It is assumed that results that meet expectations do not require investigation. 10-6 Separating an overall variance into a price variance and a quantity variance provides more information for decision-making purposes. Moreover, price and quantity variances are usually the responsibilities of different managers. 10-7 The materials price variance is usually the responsibility of the purchasing manager. The materials quantity and labour efficiency variances are usually the responsibility of production managers and supervisors....
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This note was uploaded on 12/31/2011 for the course ACCT 441 taught by Professor Johnvermeer during the Spring '08 term at Humber.

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