ACC 202 Chapter 10: Chapter 10
Document Summary
Price standards: specify how much should be paid for each unit of the input. Quantity standards: specify how much of an input should be used to make a product or provide a service. Standards are benchmarks or norms for measuring performance. In managerial accounting, two types of standards are commonly used. Standard price per unit: final, delivered cost of materials, net of discounts. Standard quantity per unit: summarized in a bill of materials. Standard rate per hour: often a single rate is used that reflects the mix of wages earned. Standard hours per unit: use time and motion studies for each labor operation. Price standard: the rate is the variable portion of the predetermined overhead rate. Quantity standard: the quantity is the activity in the allocation base for predetermine overhead. Standard costs per unit for dm, dl, and vmoh can be used to compute activity and spending variances. Price variance: difference between actual price and standard price.
