Define the term standard and give two principal uses of standard costing.
Management accounting
The company worked 29,250 direct labor-hours during the year at a cost of $9.75 per
hour. Overhead cost is applied to product s on the basis of direct labor-hours. The
denominator activity level was 22,500 hours. Budgeted fixed
overhead costs as shown on the flexible budget were $157,500, while actual fixed
overhead costs were $156,000. Actual variable overhead costs were $90,000.
Required:
i. Compute the direct materials price and quantity variances for the year.
ii. Compute the direct labor rate and efficiency variances for the year.
iii. Compute the variable overhead spending and efficiency variances for the year.
iv. Compute the fixed overhead budget and volume variances for the year.
b.
i. Define the term standard and give two principal uses of standard costing.
ii. Distinguish between ideal standards and attainable standards