MGT 5 Chapter Notes - Chapter 11: Balanced Scorecard

• School: UCSD
• Department: Rady School of Management
• Course: MGT 5
• Professor: Wade Lindenberger

Document Summary

Standard costs: predetermined unit costs, used as a measure of performance. Ideal standards: represent optimum levels of performance under perfect operating conditions. Normal standards: represent efficient levels of performance that are attainable under expected operating conditions, should be rigorous but attainable. Direct materials price standard: cost per unit of direct materials, based on the best estimate of cost of raw materials. The standard direct materials cost per unit is the standard direct materials price times the standard direct materials quantity. Direct labor price standard: rate per hour that should be incurred for direct labor. Direct labor quantity standard: the time that should be required to make one unit of the product. Standard predetermined overhead rate: sets the standard for manufacturing overhead. Normal capacity: average activity output that a company should experience over the long run. The standard manufacturing overhead cost per unit is the predetermined overhead rate times the activity index quantity standard.