15 3 points
Standard cost:
means a standard price for direct materials or a standard wage rate for labor.
is a carefully predetermined measure of what a cost should be under stated conditions.
per unit for direct materials is the actual quantity of materials to produce a unit times the price usually paid for the materials.
per unit is the sum of standard costs of the direct materials and direct labor needed to produce a unit.
16
17
3 points
Which of the following statements is true about budgets?
Budgets are formal written plans that describe the results of past operations.
Budgets enable management to control operations more effectively.
Management cannot use standard costs in the preparation of budgets.
There are usually no variances between actual amounts and budgeted amounts in most large companies
3 points
All of the following are advantages claimed for standard costs except:
requires less clerical effort.
helps establish control over costs.
provides information useful in budgeting.
will always increase worker morale.
18
3 points
19
A disadvantage of using standard costs is:
less reasonable values for inventory measurement.
a likely increase in waste and inefficiency.
workers may try to conceal unfavorable variances.
more difficulty in pinpointing production costs than need management attention.
3 points
Which of the following statements is TRUE?
In an expense center, managers are responsible for revenues and expenses over which they have control.
An appropriate goal of an expense center is the long-run minimization of expenses.
Since an appropriate investment base is not determinable, only net income is used to evaluate expense centers.
Two of the other answers are correct.
