ACC 406 Lecture Notes - Standard Cost Accounting, Purchasing Manager, Minivan

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crimsonraccoon314

18 Jun 2013

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Unit standard = quantity standard x price standard. How standards are developed historical experience, engineering studies and input from operating personnel are three potential sources of quantitative standards. Engineering studies determine most efficient way to operate and provide rigorous guidelines. Prince standards joint responsibility of operations, purchasing, personnel and accounting. Idle standards demand maximum efficiency and can be achieved only if everything is perfect. Currently attainable standard can be achieved under efficient operating conditions. Allowance made for normal breakdowns, interruptions, less than perfect skills. Planning and control unit standards are requirements for flexible budgeting systems, which is a key feature of meaningful planning and control system. Budgetary control systems compare actual costs with budgeted costs used variances. Standard costing system for operational control in manufacturing environments that use jit and continuous improvement can produce dysfunctional behavior. (may encourage purchasing department to buy in large quantities in order to get discounts, causing increase in inventories)

Related Questions

1. What is standard cost?
A. The total number of units times the budgeted amount expected
B. Any amount that appears on a budget
C. The total amount that appears on the budget for product costs
D. The amount management thinks should be incurred to produce a good or service

2. A standard cost is
A. the average cost in an industry.
B. a predetermined cost.
C. the historical cost of producing a product last year
D. a cost which is paid for a group of similar products.

3. The difference between a budget and a standard is that
A. a budget expresses what costs were, while a standard expresses what costs should be.
B. a budget expresses a total amount, while a standard expresses a unit amount.
C. a budget expresses management's plans, while a standard reflects what actually happened.
D. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system.

4. Standard costs may be used by
A. universities.
B. governmental agencies.
C. charitable organizations.
D. all of these answers are correct

5. The final decision as to what standard costs should be is the responsibility of
A. management.
B. the quality control engineer.
C. the purchasing agent.
D. the managerial accountants.

6. The most rigorous of all standards is the
A. normal standard.
B. realistic standard.
C. conceivable standard.
D. ideal standard.

7. An unfavorable materials quantity variance would occur if
A. more materials were purchased than were used.
B. actual pounds of materials used were greater than the standard pounds allowed
C. actual pounds of materials used were less than the standard pounds allowed
D. actual labor hours used were greater than the standard labor hours allowed

8. Which of the following statements is true?
A. Variances are the differences between total actual costs and total standard costs.
B. When actual costs exceed standard costs, the variance is favorable.
C. An unfavorable variance results when actual costs are decreasing but standards are not changed.
D. all of the above are true

10. Labor efficiency is measured by the
A. materials quantity variance.
B. labor quantity variance.
C. labor rate variance.
D. total labor variance.

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ACC 406 Lecture Notes - Standard Cost Accounting, Purchasing Manager, Minivan

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