ACCT-311 Lecture Notes - Lecture 11: Kilogram, Orkesta Runestones
18 Mar 2016
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Document Summary
Used for planning labor, material and overhead requirements. Accountants engineers, personnel administrators and production managers combine efforts to set standards based on experience and expectations. Practical standards: should be challenging but at the same time they should be attainable. Ideal standards: no one is going to get sick, nothing wasted, and not attainable and demotivate people because they know they cannot achieve. Exercise 11-2 computing all variances (lo3 cc15, 17, 18; lo4 cc22, 23) Huron company produces a commercial cleaning compound known as zoom. The direct materials and direct labour standards for one unit of zoom follow: The budgeted fixed overhead cost is ,800 per month. The denominator activity level of the allocation base is 800 direct labor-hours. Compute the direct materials price and quantity variances for the month. Since both are unfavorable, you add the amount unfavorable. Compute the direct labor rate and efficiency variances for the month.
