ACCT208 Study Guide - Midterm Guide: Standard Cost Accounting, Cost Driver, Transfer Pricing
Document Summary
Concentration on spending or expense variances- standard costs. Standard costs: benchmark used to measure performance- how much inputs for making product cost (dm, dl, oh) and how much we should use in process. Standard price per unit of material- cost of the material net of discounts and includes any freight or shipping costs. Standard quantity per unit of product- required to finish product plus allowance for scrap and normal inefficiencies. Standard rate per hour- average labor rate for each class of direct labor worker. Standard hours per unit of product or service hours needed to complete one unit of product or perform the service. Standard vs. budget: budget: total estimated cost of input for a period, standard: budget for one unit of product per input (dm, dl, oh) Compare what we actually used to what we should have used: quantity. Compare what we actually spent to what we should have spent: price.