ACCT208 Study Guide - Midterm Guide: Standard Cost Accounting, Cost Driver, Transfer Pricing

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taupelion650

3 May 2016

School

University of Delaware

Department

Accounting

Course

ACCT208

Professor

Dragone Debra

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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.

Related Questions

topaz company makes one product and has set the followingstandards for materials and labor:

	direct materials	direct labor
standard quantity or hours per unit	? pounds	2.5 hours
standard price or rate	? per pound	$9.00 per hour
standard cost per unit	?	$22.50

during the past month, the company purchased 6,000 pounds ofdirect materials at a cost of $16,500. all of this material wasused in the production of 1,400 units of product. direct labor costtotaled $28,500 for the month. the following variances have beencomputed:

materials quantity variance	$1,200 U
total materials spending variance	$300 F
labor efficiency variance	$4,500 F

1. for direct materials:

a. compute the standard price per pound for materials

b. compute the standard quantity allowed for materials for themonth's production

c. compute the standard quantity of materials allowed per unitof product

coffeewhale12

Problem 10-11 Direct Materials and Direct Labor Variances; Computations from Incomplete Data [LO10-1, LO10-2]

Sharp Company manufactures a product for which the following standards have been set:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	3	feet	$	5	per foot	$	15
Direct labor	?	hours		?	per hour		?

During March, the company purchased direct materials at a cost of $45,240, all of which were used in the production of 2,190 units of product. In addition, 4,500 direct labor-hours were worked on the product during the month. The cost of this labor time was $31,500. The following variances have been computed for the month:


Materials quantity variance	$	1,950	U
Labor spending variance	$	3,030	U
Labor efficiency variance	$	780	U

Required:

1. For direct materials:

a. Compute the actual cost per foot of materials for March.

b. Compute the price variance and the spending variance.

2. For direct labor:

a. Compute the standard direct labor rate per hour.

b. Compute the standard hours allowed for the monthâs production.

c. Compute the standard hours allowed per unit of product.

byzantiumlizard838

topaz company makes one product and has set the followingstandards for materials and labor:

	direct materials	direct labor
standard quantity or hours per unit	? pounds	2.5 hours
standard price or rate	? per pound	$9.00 per hour
standard cost per unit	?	$22.50

materials quantity variance	$1,200 U
total materials spending variance	$300 F
labor efficiency variance	$4,500 F

for direct labor:

a. compute the actual direct labor cost per hour for themonth

b. compute the labor rate variance

ceruleanwater-buffalo341

ACCT208 Study Guide - Midterm Guide: Standard Cost Accounting, Cost Driver, Transfer Pricing

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