Standard Cost Accounting

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Standard Cost Accounting Questions and Answers

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Explain how to learn standard costing accounting for manufacturing.
The difference between actual costing and normal costing is a) normal costing uses budgeted indirect-costs. b) normal costing uses actual quantities of direct-costs. c) actual costing uses actual q...
What are ideal standards? Currently attainable standards? Of the two which is usually adopted? Why?
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X442 and Y661. The company us...
The Absolute Power Co. just issued a dividend of $2.20 per share on its common stock. The company is expected to maintain a constant 6.% growth rate in its dividends indefinitely. If the stock sell...
Simplification of all costs into only fixed and variable costs distort the actual cost behavior pattern of a firm. Yet businesses rely on this method of cost classification. Explain why.
Every choice results in a foregone best alternative, which economists call the: A. accounting cost. B. switching cost. C. average cost. D. opportunity cost. E. inferior cost.
Opportunity costs or implicit costs of a "Mom & Pop"-owned business are: A. equal to accounting costs. B. equal to accounting profits. C. equal to earnings or profits that could have occurred using...
Yellow Produce is a wholesale manufacturer of tea products. It operates a variable costing system: Bottled premium tea leaves-grade A Standard variable product cost Unit ($) Direct material (6 kil...
The direct materials price variance for the recent accounting period is $8,000 unfavorable. The direct material associated with this variance had a standard cost of $200,000. At the end of the acco...
Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: Inputs (1) Standard Quantity or Hours (2) Standard Price or Rate...
What is a standard cost? A. The total number of units times the budgeted amount expected. B. Any amount that appears on a budget. C. The total amount that appears on the budget for product costs...
If the standard quantity (SQ), actual quantity (AQ), standard price (SP), and actual price (AP) are 350 units, 400 units, $12, and $13 respectively, then the total budget variance (or, that is, the...
Explain the difference between a cost standard and an efficiency standard. Give an example of each. (Include reference)
29 grams of material at $0.30 per gram .15 direct labor hours at $12.00 Overhead is applied at $17.00 per direct labor hour. What is the total standard cost for one unit of product that would appea...
A Texas-based company had a raw materials inventory of $122,000 as of December 31, 2010, and $102,000 as of December 31, 2011. During 2011 the company purchased $150,000 of raw materials, incurred...
Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are known as: a. variable costs. b. fixed costs. c. s...
For normal costing, even though the budgeted indirect-cost rate is based on estimates, indirect costs are allocated to products based on actual levels of the cost-allocation base. True False Explain.
The Phelan Company had 14,000 units in beginning work in process, 60% complete. 20,000 units were completed and transferred out during the month. Ending work in process is 60% complete, which is eq...
Webb Co. acquired 100% of Rand Inc. on January 5, 2018. During 2018, Webb sold goods to Rand for $2,400,000 that cost Webb $1,800,000. Rand still owned 40% of the goods at the end of the year. Cost...
Assume that a certain nursing home has two categories of payers. Medicaid pays $60.00 per day and private pay patients pay the established per diem, but approximately 10 percent of private pay char...
A) List some of the reasons suppliers are reluctant to share detailed cost information. B) What can purchasers do to convince suppliers that shared cost data will not be exploited?
The following data is given for the Bahia Company: Budgeted production (at 100% of normal capacity) 1,049 units Actual production 917 units Materials: Standard price per pound $1.94 Standard po...
To what account would any variance ultimately be charged in a standard costing system?
You are evaluating two different silicon wafer milling machines. The Techron I costs $252,000, has a three-year life, and has pretax operating costs of $67,000 per year. The Techron ll costs $440,0...
Write an overview of cost clarification (such as Product Costs and Period Costs) with an introduction, a body with examples, and conclusion.
1. Explain why standard costing systems are adopted. 2. How does standard costing improve the control function? 3. Discuss the differences among actual costing, normal costing, and standard costi...
An original budget for 2009 included $600,000 fixed overhead and $400,000 variable overhead. Labor hours were estimated at 200,000 labor hours. The predetermined overhead rate was $5 per hour. Actu...
Schlager Corporation makes a product with the following standard costs: The company reported the following results concerning this product in August
John's Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the seaso...
How is opportunity cost related to choice?
Lewis Company's standard labor cost of producing one unit of Product DD is 3.20 hours at a rate of $12.00 per hour. During August, 42,600 hours of labor are incurred at a cost of $12.19 per hour to...
Assume that the current stock of capital for a firm is 100 factories. The depreciation rate is 10% and the real rate of interest offered by banks is 5%. How much should the firm with 100 factories...
Brighton Services repairs locomotive engines. It employs 100 full-time workers at $20 per hour. Despite operating at capacity, last years performance was a great disappointment to the managers. In...
Trico Company set the following standard unit costs for its single product. Direct materials (30 lbs. @ $4 per lb.) $120 Direct labor (5 hrs. @ $14 per hr.) 70 Factory overhead - variable (5 hrs....
Ingles Company manufactures external hard drives. At the beginning of the period, the following plans for production and costs were revealed: Units to be produced and sold 25,000 Standard cost pe...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X442 and Y661. The company uses
Kita Ltd produces a single product in one of its factories. For control and measurement purposes, a standard costing system was recently introduced and is now in operation. The standards set for t...
Patel and Sons, Inc., uses a standard cost system to apply overhead costs to units produced. Practical capacity for the plant is defined as 55,500 machine hours per year, which represents 27,750 un...
Samantha and Rashida are planning a trip to Padre Island, Texas, during spring break. Required: 1. Using incremental costs only, what would it cost Kallie to accompany Samantha and Rashida? $ 2....
Perez Company uses both standards and budgets. For the year, estimated production of Product X is 543,500 units. Total estimated cost for materials and labor are $1,304,400 and $1,739,200. Compute...
Is $20 per direct labor hour. If the actual direct labor payroll was $148960 for 7600 direct labor hours worked, the direct labor price (rate) variance is A. $3040 unfavorable. B. $3800 favorable...
You have been given the following information about the production of Usher Co., asked to provide the plant manager with information for a meeting with the vice president of operations. Standard C...
Muntjac Corporation's flexible budget cost formula for indirect materials, a variable cost, is $0.75 per unit of output. Assume that actual units produced equals standard units produced. If the com...
Apogee Fashions uses standard costs for its manufacturing division. The allocation base for overhead costs is direct labor hours. From the following data, calculate the fixed overhead allocated to...
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below $ 8.00 5.58 2.75 5.25 $21.58 Direct materials-1 pound plastic at $8 per pound Direct labor-0.50...
Hilary owns a fruit smoothie shop at the local mall. Each smoothie requires 1/2 pound of mixed berries, which are expected to cost $6 per pound during the summer months. Shop employees are paid $6...
Blue Company accumulates the following data concerning raw materials in making one gallon of the finished product. (1) Price - net purchase price $2.60, freight-in $0.20, and receiving and handling...
Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 70-gallon batch. 4,000 ounces of grape concentra...
The following data relating to direct materials cost for October of the current year are taken from the records of Good Clean Fun Inc., a manufacturer of organic toys: Quantity of direct materials...
Hart Company made 3,300 bookshelves using 26,000 board feet of wood costing $322,400. The company's direct materials standards for one bookshelf are 9 board feet of wood at $12.30 per board foot....
Budgets and Standard Costing: Evaluate the different types of budgets and discuss how operating and financial budgets are prepared for a manufacturing company. Discuss the use of budgets and stand...
Roanoke Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (2,200 bars) are as follows:...
Tang Company accumulates the following data concerning raw materials in making its finished product: (1) Price per pound of raw materials - net purchase price $3.09, freight-in $0.79, and receiving...
BatCo makes metal baseball bats. Each bat requires 1 kg of aluminum at $18 per kg and 0.25 direct labor hours at $20 per hour. Overhead is assigned at the rate of $40 per direct labor hour. Standa...
John Fleming, the chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital's lab. Charges for lab tests are consistently higher at Valley View than at ot...
Rudd Clothiers is a small company that manufactures tall-men?s suits. The company has used a standard cost accounting system. In May 2017, 10,400 suits were produced. The following standard and act...
Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $2 per pound): $12 Direct labor (2...
Fuller company produces paper towels. The company has established the following direct materials and direct labor standards for the case of paper towels: Paper pulp (3 lbs. @ $0.40) $1.20 Labor (2...
ABC Company's budgeted sales for June, July, and August are 15,000, 19,000, and 16,700 units respectively. Each unit that ABC Company produces uses 4 pounds of raw material. ABC requires 35% of the...
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