AFM102 Chapter Notes - Chapter 10: Standard Cost Accounting, Variable Cost, Unemployment Benefits
20 Mar 2017
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Document Summary
Management by exception: a system of management in which standards are set for various operating activities that are then periodically compared to actual results. Any differences that are deemed significant are brought to the attention of management as (cid:522)exceptions(cid:523) Ideal standards: standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times. Practical standards: standards that allow for normal machine downtime and other work interruptions and can be attained through reasonable, although highly efficient, efforts by the average employee. Standard price per unit: the price that should be paid for a single unit of materials, including shipping, receiving, and other such costs, net of any discounts allowed. Standard quantity per unit: the amount of materials that should be required to complete a single unit of product, including allowances for normal waste, spoilage, and other inefficiencies.
