Chapter 10 Part I Theory Questions

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online