Exam 24: Standard Costs and Balanced Scorecard

Use the following information for questions . Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10 per pound, and receiving and handling costs are $.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours, respectively. -The standard direct materials price per pound is

The costing of inventories at standard cost for external financial statement reporting purposes is

A company purchases 12,000 pounds of materials. The materials price variance is $6,000 favorable. What is the difference between the standard and actual price paid for the materials?

Standards which represent optimum performance under perfect operating conditions are called _______________ standards, but most companies use _________________ standards which are rigorous but attainable.

The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor price variance was $3,150 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was the actual rate of pay for direct labor?

A total materials variance is analyzed in terms of

During January, Ajax Co. incurs 1,850 hours of direct labor at an hourly cost of $11.80 in producing 1,000 units of its finished product. Ajax standard labor cost per unit of output is $22 (2 hours x $11.00). Instructions Compute the total, price, and quantity labor variances for Ajax Co. for January.

The standard direct materials quantity does not include allowances for

The difference between actual hours times the actual pay rate and actual hours times the standard pay rate is the labor _________________ variance.

The balanced scorecard

Explain the similarities and differences between standards and budgets. (b) Contrast the accounting for standard and budgets.

Standard costs may be incorporated into the accounts in the general ledger.

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1,800 units, the actual direct labor cost was $48,000 for 3,000 direct labor hours worked, the total direct labor variance is

Most companies that use standards set them at

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $117,600 for 6,000 direct labor hours worked, the direct labor price (rate) variance is

Hector Company has developed the following standard costs for its product for 2016: The company expected to produce 30,000 units of Product A in 2017 and work 90,000 direct labor hours. Actual results for 2017 are as follows: $\bullet$ 31,000 units of Product A were produced. $\bullet$ Actual direct labor costs were $746,200 for 91,000 direct labor hours worked. $\bullet$ Actual direct materials purchased and used during the year cost $346,500 for 126,000 pounds. $\bullet$ Actual variable overhead incurred was $155,000 and actual fixed overhead incurred was $205,000. Instructions Compute the following variances showing all computations to support your answers. Indicate whether the variances are favorable or unfavorable. (a) Materials quantity variance. (b) Total direct labor variance. (c) Direct labor quantity variance. (d) Direct materials price variance. (e) Total overhead variance.

The balanced scorecard approach

Dillon has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $46,970. Dillon's labor quantity variance is

Standard costs may be used by

Budget data are not journalized in cost accounting systems with the exception of