Chapter10: Standard Costs and Variances

The flashcards below were created by user gabo on FreezingBlue Flashcards.

1. Ideal standards
Standards that assume peak efficiency at all times. (p. 420)
2. Labor efficiency variance
The difference between the actual hours taken to complete a task and the standard hours allowed for the actual output, multiplied by the standard hourly labor rate. (p. 430)
3. Labor rate variance
The difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period. (p. 432)
4. Management by exception
A management system in which standards are set for various activities, with actual results compared to these standards. Significant deviations from standards are flagged as exceptions. (p. 419)
5. Materials price variance
The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased. (p. 429)
6. Materials quantity variance
The difference between the actual quantity of materials used in production and the standard quantity allowed for the actual output, multiplied by the standard price per unit of materials. (p. 427)
7. Practical standards
Standards that allow for normal machine downtime and other work interruptions and that can be attained through reasonable, though highly efficient, efforts by the average worker. (p. 421)
8. Price variance
A variance that is computed by taking the difference between the actual price and the standard price and multiplying the result by the actual quantity of the input. (p. 424)
9. Quantity variance
A variance that is computed by taking the difference between the actual quantity of the input used and the amount of the input that should have been used for the actual level of output and multiplying the result by the standard price of the input. (p. 424)
10. Standard cost card
A detailed listing of the standard amounts of inputs and their costs that are required to produce one unit of a specific product. (p. 420)
11. Standard cost per unit
The standard quantity allowed of an input per unit of a specific product, multiplied by the standard price of the input. (p. 423)
12. Standard hours allowed
The time that should have been taken to complete the period's output. It is computed by multiplying the actual number of units produced by the standard hours per unit. (p. 425)
13. Standard hours per unit
The amount of direct labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects, and other normal inefficiencies. (p. 422)
14. Standard price per unit
The price that should be paid for an input. (p. 421)
15. Standard quantity allowed
The amount of an input that should have been used to complete the period's actual output. It is computed by multiplying the actual number of units produced by the standard quantity per unit. (p. 425)
16. Standard quantity per unit
The amount of an input that should be required to complete a single unit of product, including allowances for normal waste, spoilage, rejects, and other normal inefficiencies. (p. 421)p. 444
17. Standard rate per hour
The labor rate that should be incurred per hour of labor time, including employment taxes and fringe benefits. (p. 422)
18. Variable overhead efficiency variance
The difference between the actual level of activity (direct labor-hours, machine-hours, or some other base) and the standard activity allowed, multiplied by the variable part of the predetermined overhead rate. (p. 433)
19. Variable overhead rate variance
The difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period. (p. 434)
 Author: gabo ID: 189616 Card Set: Chapter10: Standard Costs and Variances Updated: 2012-12-15 17:19:50 Tags: ACC 202 Folders: Description: Key terms Show Answers: