Principles of Managerial Accounting · free preview
How and Why a Standard Cost Is Developed
Standard costs are carefully predetermined per-unit cost targets built from engineering and price analysis, serving as benchmarks for variance analysis, inventory valuation, and pricing.
1. What a standard cost is
What a standard cost is
2. Setting standards
Setting standards
3. Ideal versus currently attainable standards
Ideal versus currently attainable standards
4. Standards in the system
Standards in the system
5. Standard cost definition
What is a standard cost? Use the figures from the worked example in this lesson and state the result in the requested units.
6. Materials standard components
Which two components make up a direct materials standard?
7. Ideal standard drawback
What is the chief drawback of ideal standards for performance evaluation?
8. Labor rate standard source
Where does the labor rate standard come from?
9. Quantity standard source
The materials quantity standard comes from ____ specifications of what the product should use. One word.
10. Standard cost synonym
A standard cost is also called a ____ cost, a predetermined cost used to value inventory and measure variances. One word.
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