# Shared Flashcard Set

## Details

Chapter 10 Standard Costs and Variances
11/13/17
26
Accounting
11/12/2017

Term
 Standard
Definition
 Benchmark for measuring performance
Term
 Standard quantity per unit
Definition
 the amount of direct materials that should be used for each unit of finished products
Term
 Standard price per unit
Definition
 price that should be paid for each unit of direct materials
Term
 Standard hours per unit
Definition
 amount of direct labor time that should be required to complete a single unit of product
Term
 Standard rate per hour
Definition
 labor rate that should be incurred per hour of labor time
Term
 Price Variance
Definition
 = (the actual price - the standard price) X result by actual quantity of input
Term
 Quantity variance
Definition
 = (actual quantity of input used - amount of input that should have been used) X standard price of input
Term
 why are price and quantity variance separate
Definition
 because they usually have different causes
Term
 Standard quantity allowed
Definition
 amount of DM that should have been used to complete the period actual output= actual output X standard quantity per unit
Term
 Standard hours allowed
Definition
 time that should have been taken to complete the period output= units produced X standard hours per unit
Term
 Material Price Variance
Definition
 = (direct material's actual price per unit - standard price per unit) X quantity purchased
Term
 Materials quantity variance
Definition
 = (actual quantity of materials used - standard quantity allowed) X standard price per unit
Term
 Labor rate variance
Definition
 = ( actual hourly labor rate - standard rate) X number of hours worked= AH(AR-SR)
Term
 Labor efficiency variance
Definition
 = (actual labor hours - standard hours allowed) X standard hourly rate
Term
Definition
 = actual variable OH cost - standard costs incurred based on actual activity
Term
Definition
 = (actual level of activity - standard activity allowed) X variable part of predetermined OH rate
Term
 poor supervision can cause
Definition
 unfavorable labor efficiency variance
Term
 Quantity Variance
Definition
 difference between amount of an input and the amount that should have been used
Term
 Spending Variance
Definition
 actual results - flexible budget amount
Term
 if the actual level of activity is greater than the planned level of activity
Definition
 the activity variance will be unfavorable
Term
 labor rate variance
Definition
 -F, if Actual < Standard-U, if Actual > Standard
Term
 Standard Cost allowed is favorable
Definition
 when standard cost allowed for actual output
Term
 Causes of Unfavorable labor efficiency variance
Definition
Term
 if managers do not adjust the workforce in response to changes in workload
Definition
 the direct labor workforce becomes a fixed rate in the short run
Term
 Direct materials quantity variance
Definition
 F, if AQ < SQU, if AQ > SQ
Term
 Standard Cost Card
Definition
 shows the standard quantity and standard price of the inputs required to produce a unit of a specific product
Supporting users have an ad free experience!