18 Questions
Which factor is determined first when setting direct materials standards?
Quality
What should direct labor standards be adjusted for?
Expected breaks, downtime, and spoilage
What is a key consideration in developing direct materials standards?
Allowing for losses, spoilage, scrap, and waste
How can direct labor standards be aligned with the strategic goals of a company?
By determining the quality of the workforce
What should be factored into standard setting and variance analysis for direct labor?
Productivity and learning
Why are direct materials standards determined first before quantity and price?
To allow for losses, spoilage, scrap, and waste
Which of the following is the most accurate way of determining standard costs according to the text?
Activity analysis
In the context of determining standard costs, which method is most expensive to implement according to the text?
Activity analysis
What is a disadvantage of using historical data to determine standard costs as mentioned in the text?
Less reliable than activity analysis
Benchmarking can help a firm maintain its competitive edge. What kind of data does benchmarking typically involve?
External industry data
standard costs are derived from which source?
General standards for operations
Activity-based costing is described as the most thorough costing method. What aspect makes it less favorable for companies?
Most expensive to implement
Which of the following is true regarding responsibility accounting?
A responsibility accounting system segregates uncontrollable costs from controllable costs.
In the context of Cost Standards in Budgeting, what is the main purpose of standards?
To align actual incurred costs with budgeted costs.
What is an example of an uncontrollable cost that might be excluded from a manager's performance report?
Fixed overhead costs
How do fixed costs differ from variable costs in relation to controllability?
Fixed costs are sometimes uncontrollable; variable costs are sometimes controllable.
Which statement accurately describes the relationship between indirect costs and controllability?
Indirect costs are not always uncontrollable.
What is the primary difference between direct and indirect costs in terms of their impact on budgets?
Direct costs can be directly traced to specific cost objects, while indirect costs cannot.
This quiz covers sources for standards setting in the context of planning, budgeting, and forecasting. Topics include activity analysis for identifying and analyzing job activities, as well as the resources used in determining standards for operations.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
