ACC 222 Chapter Notes - Chapter 10: Variable Cost, Negative Number
Document Summary
A standard is a benchmark for measuring performance. Quantity standards specify how much of an input should be used to make a product or provide a service. Price standards specify how much should be paid for each unit of the input. Standard quantity per unit- the amount of an input that should be required to complete a single unit of product, including allowances for normal waste, spoilage, rejects, and other normal inefficiencies. Defines the amount of direct materials that should be used for each unit of finished product. Standard price per unit- the price that should be paid for an input. Defines the price that should be paid for each unit of direct materials and it should reflect the final, delivered cost of those materials. Standard hours per unit- the amount of direct labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects, and other normal inefficiencies.