COMMERCE 2AB3 Chapter Notes - Chapter 12: Balanced Scorecard, Standard Cost Accounting, Cost Accounting

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Khalid Nainar

Document Summary

Standard costs: predetermined unit costs that are used as measures of performance. Ideal standards: standards based on the optimum level of performance under perfect operating conditions. Normal standards: standards based on an efficient level of performance that are attainable under expected operating conditions. Direct materials price standard: the cost per unit of direct materials that should be incurred. Direct materials quantity standard: the quantity of direct materials that should be used per unit of finished goods. The standard direct materials cost per unit is the standard direct materials price times the standard direct materials quantity. Direct labour price standard: the rate per hour that should be incurred for direct labour. The standard direct labour cost per unit is the standard direct labour rate times the standard direct labour hours. Standard predetermined overhead rate: an overhead rate that is determined by dividing the budgeted overhead costs by an expected standard activity index.