222 CH 11 HW Solutions 5th edition

222 CH 11 HW Solutions 5th edition - CHAPTER 11 Standard...

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CHAPTER 11 Standard Costs and Balanced Scorecard Homework Solutions ANSWERS TO QUESTIONS (5, 12, 14, 15) 5. 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. 12. Overhead applied = $8 X 27,000 = $216,000. 14. The purchasing department would be responsible for an unfavorable materials price variance when it paid more than the standard price for the materials. The purchasing department would also be responsible for an unfavorable materials quantity variance if it purchased materials of inferior quality which caused an excess use of materials. 15. The four perspectives of the balanced scorecard are: financial, customer, internal process, and learning and growth. The financial perspective employs financial measures of performance used by most firms. The customer perspective evaluates how well the company is performing from the viewpoint of those people who buy and use its product in terms of price, quality, product innovation, customer service, and other dimensions. The internal process perspective evaluates the value chain—product development, production, delivery and after-sale service—to ensure that the company is operating effectively and efficiently. The learning and growth perspective evaluates how well the company develops and retains its employees. The four perspectives are linked in that the results in one perspective influence the results in the next. SOLUTIONS TO BRIEF EXERCISES (2, 3, 4, 6, 7) BRIEF EXERCISE 11-2 (a) Standard materials price per gallon = $2.50 ($2.20 + $.20 + $.10). (b)
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222 CH 11 HW Solutions 5th edition - CHAPTER 11 Standard...

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